As part of the deal, Amazon Prime shoppers will receive a free Grubhub+ membership, extending a deal that began in 2022.
Downtown workers pass by the Burnham Center, home to Grubhub’s Chicago headquarters, on May 15, 2019. Amazon.com Inc. is increasing its stake in Grubhub to as much as 18% and expanding its partnership with the food delivery service to allow U.S. users to order takeout directly on Amazon’s website and shopping app.
“This will enable us to engage with the tens of millions of Prime members and introduce them to Grubhub,” said Grubhub Chief Executive Officer Howard Migdal in an interview. “We expect this to be a large catalyst for new customer growth for Grubhub.”Amazon has made a habit of acquiring stakes in its major business partners, often through warrants, an effort to realize more of the financial windfall of the tie-up.
Competition between food-delivery firms in the U.S. has also been intense. Grubhub’s market share in the U.S. has been on a steady decline since 2021, reaching around 8% in March, according to Bloomberg Second Measure data. It trails behind DoorDash Inc., which holds a 67% lead, and Uber Technologies Inc., which has 23%.
Amazon started offering members of its Prime program free delivery from Grubhub in 2022, a benefit it portrayed as a temporary perk. The offer was extended a year later. Now, Amazon says it plans to offer members — who pay $139 a year in the U.S. — free delivery through Grubhub on an ongoing basis. The company says it has more than 200 million Prime members globally.
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