Amazon will shutter its Amazon Restaurants food delivery service in the U.S. later this month, GeekWire has learned.
Amazon Restaurants first launched in Seattle back in 2015. Amazon expanded the program across more than 20 U.S. cities and later in London. The service gave Prime members a way to get meals delivered to their door, using the Amazon Restaurants website or through the Prime Now shopping app.
But Amazon ended the program in London this past November and will say goodbye to its U.S. service later this month.
“As of June 24th, we will discontinue the Amazon Restaurants business in the US,” an Amazon spokesperson said in a statement shared with GeekWire. “Many of the small number of employees affected by this decision have already found new roles at Amazon, and others will be provided personalized support to find a new role within, or outside of, the company.”
Amazon will also shut down Daily Dish, a workplace lunch delivery service that launched in 2016, on June 14.
This move comes less than a month after Amazon led a $575 million funding round for Deliveroo, a U.K.-based food delivery company.
The company had been updating its Amazon Restaurants blog up until last month, and its Twitter feed is still active. There were job postings within the Amazon Restaurants team as recently as February.
Enchiladas Suiza from Senor Moose Cafe in Seattle are hitting the spot today. pic.twitter.com/2FXMFjuH5z
— Amazon Restaurants (@restaurants) June 9, 2019
Amazon has dabbled in food delivery ever since launching grocery delivery service AmazonFresh in Seattle more than a decade ago. The company launched a takeout service in 2014 that let customers use the now-defunct Amazon Local app to order food for pick-up. Amazon then began allowing customers to order food via Amazon Local directly from restaurants, who delivered the meals.
It’s unclear what, if any, moves are left in Amazon’s restaurant delivery arsenal. The company still delivers groceries from Whole Foods via Prime Now in nearly 100 U.S. markets.
The closure of Amazon Restaurants after investing serious time and money in the service is a rare retreat from the e-commerce behemoth.
Your periodic reminder that Amazon fails at stuff, too. (Bezos says he loves failures.
But sometimes failures aren't noble. They're just failures.) https://t.co/UDETgY5rs8
— Shira Ovide (@ShiraOvide) June 11, 2019
The competition is fierce in the food delivery market, with companies such as Uber, Grubhub, and DoorDash seeing big growth in recent years. Those three companies combined hold more than 75 percent of the U.S. food delivery market share.
Uber Eats, which launched more than three years ago and is live in 500 cities globally, generated $1.46 billion in revenue last year, up from $587 million in 2017, and brought in $536 million during the first quarter of 2019.
Forbes called Uber Eats the company’s “secret gold mine” and on the company’s earnings call last month, Uber CEO Dara Khosrowshahi called food delivery “a huge category” and said it could eventually be larger than the ride-hailing business.
Uber listed Amazon as an Uber Eats competitor in its IPO documents earlier this year.
Grubhub, meanwhile, saw revenues reach $324 million for the first quarter, up 39 percent year-over-year, though its operating margin dipped by more than 10 percent, The Motley Fool noted. Update: Shares of Grubhub were up more than 6 percent Tuesday morning.
Investors continue to place big bets on food delivery companies. DoorDash raised $600 million last month, valuing it at $12.6 billion.
Update, June 12: Amazon sent an email to Amazon Flex delivery drivers notifying them of the shutdown: “Amazon Restaurants will be closing later this month. After June 24th, you will no longer see offers for Restaurants deliveries,” the email reads. “You will continue to see blocks for all the other programs that Amazon Flex Delivery Partners support: Amazon.com, Prime Now, AmazonFresh, and Whole Foods.”