Amazon Prime members can now order food from certain restaurants through Grubhub without paying a delivery fee, thanks to a new deal between the companies.
The deal offers Prime members one year of Grubhub+, after which members will automatically be charged the service’s current $9.99 monthly rate. Orders must be at least $12 to avoid the delivery fee.
The partnership gives Amazon the option to purchase over a two percent stake in Grubhub at an “undisclosed but negligible price,” according to a statement from Just Eat Takeaway.com, the Dutch company that owns Grubhub. The company can also buy an additional 13 percent stake in Grubhub at an unspecified “formula-based price” that depends on Grubhub’s performance.
The deal follows a notable financial downturn for Grubhub: As pandemic restrictions lift, the demand for food delivery services has diminished as people return to dining in at restaurants. What’s more, Grubhub lingers far behind other delivery services in the US, controlling about 13 percent of the food delivery market as opposed to DoorDash’s 60 percent and Uber Eats’ 24 percent (per Bloomberg).
Just Eat is the largest food delivery platform in Europe, but the company said it would continue to explore a partial or full sale of Grubhub as business continues to worsen. At any rate, Grubhub isn’t Amazon’s first foray into the meal delivery industry. The e-commerce mammoth also owns a stake in Deliveroo, a British service whose shares are down about 50 percent this year.