News

Reports claim Uber to shut Drizly

16 January 2024 By James Evison

American alcohol delivery service Drizly is due to be closed by Uber after purchasing it for US$1.1bn just three years ago, reports have claimed.

According to American news site Axios, Pierre-Dimitri Gore-Coty, who is Uber’s SVP of delivery, said: “After three years of Drizly operating independently within the Uber family, we’ve decided to close the business and focus on our core Uber Eats strategy of helping consumers get almost anything — from food to groceries to alcohol — all on a single app.”

He added: “We’re grateful to the Drizly team for their many contributions to the growth of the BevAlc delivery category as the original industry pioneer.”

Drizly became a wholly-owned subsidiary of Uber in 2021, and was integrated into the Uber Eats app, while also maintaining a separate Drizly app service. As part of the move, Uber were subsequently able to access Drizly’s operation in 1,400 cities across US states and Alberta in Canada.

It would now appear that the brand which was launched in 2012, and once dubbed ‘the Amazon of Liquor’, is shutting down.

The previous success of the app was through allowing users to compare the price of drinks in shops across their local area, and then order alcohol on-demand through its website and mobile app. It also offered retail partners the opportunity to have technology to verify customers’ ID.

Behavioural shift

Uber purchased Drizly after also splashing out on a US$2.65bn deal for food delivery service Postmates, as well as US$459m in 2019 for a 51% stake in Latin America’s grocery delivery platform Cornershop.

The move to buy Drizly, which occurred at the height of the pandemic, was taken as behavioural change shifted radically, and ride-sharing all but disappeared as the world locked down. In the first quarter of 2020 alone, Uber lost US$2.9bn as non-essential travel was effectively banned across much of the globe.

Its Uber Eats arm posted a 125% rise in the first three months of the financial year to 30 September 2020 as restaurants and hospitality were closed and consumers looked to takeaway options. The second quarter results in 2020 also meant that the Eats division overtook its rides division for the first time.

Rebound

But the company, and its ride-hailing core element, has rebounded strongly in the past two years, highlighting a shift away from Uber’s diversification of its offer.

A return to journeys in a post-pandemic world has seen a surge in travel, with US$6.9bn in revenue for the first three months of 2022, and growing 136% on 2021 levels before returning to pre-pandemic levels by 2023 and further growth into 2024.

There was also concern about Drizly and its platform after a Federal Trade Commission investigation in 2020 discovered a hack that exposed information of 2.5 million customer, with claims the company having been aware of the issue for two years without resolving it.

Speaking at the time of the purchase in 2021, CEO of Uber, Dara Khorsrowshahi said the firm was bringing Drizly into Uber so “we can accelerate that trajectory by exposing Drizly to the Uber audience and expanding its geographic presence into our global footprint in the years ahead”.

Drizly co-founder and CEO, Cory Rellas, described the sale to Uber in 2021 as a company who would “accelerate Drizly on its mission to be there when it matters”.