Uber has decided to close down its alcohol delivery app, Drizly, just three years after its acquisition for a substantial USD 1.1 billion. (inside.beer, 13.10.2021) Despite Drizly's prominence as North America's largest online alcohol marketplace during the pandemic-driven surge in at-home deliveries, Uber plans to officially end its operations by March 2024.
Originally operating as a standalone app, Drizly was intended to integrate into Uber Eats. However, Uber's senior vice president of delivery, Pierre Dimitri Gore-Coty, revealed a strategic shift, emphasizing the focus on the "core Uber Eats strategy" to offer consumers a comprehensive one-stop-shop for food, groceries, and alcohol within a single app.
The closure of Drizly aligns with Uber's decision to streamline its product delivery services, resulting in the discontinuation of the Cornershop grocery shopping app. Nevertheless, Uber Eats will continue to deliver groceries and alcohol despite these changes.
Uber's acquisition of Drizly coincided with a surge in its delivery business during the early days of the pandemic, supplemented by the purchase of Postmates for USD 2.65 billion (inside.beer, 6.7.2020), consolidating its position in the competitive delivery industry. Although Uber's core ridesharing business faced losses during the pandemic, recent quarters have seen a rebound, with November reporting third-quarter gross bookings exceeding expectations.
Uber's decision is driven by the goal of eliminating redundancies and enhancing user convenience. The alcohol category on Uber Eats has witnessed a global doubling in the past year, facilitating a seamless transition for Drizly users. As of Q3 2023, Uber boasted 142 million active monthly users, with the majority of Drizly users already having Uber accounts.
Founded in 2012, Drizly partnered with retail to directly deliver alcohol to consumers. Despite a substantial surge in sales during the pandemic, reporting a 350% increase in 2020, Drizly faced challenges related to security breaches dating back to 2018, leading to scrutiny from the Federal Trade Commission.
Uber assures there will be no immediate layoffs, and some employees may be offered positions at Uber based on the company's needs once the alcohol-delivery business concludes in March.
The closure of Drizly signifies the end of an era for a service that played a pivotal role in ensuring Americans had a steady supply of beer, wine, and spirits during the pandemic. Gore-Coty expressed gratitude to the Drizly team for their pioneering efforts in the beverage-alcohol delivery category.