Uber has announced it’s going to close down Drizly, the alcohol delivery service it purchased back in 2021. It seems like Uber wants to bring all its delivery options into one main application. Drizly is going to stop running by the end of March as Uber works on making their app simpler and faster.
Background of Drizly’s Acquisition and Operation
Starting in 2012, Drizly gained popularity. In 2020, during the pandemic, its sales shot up by 350% compared to the year before. On April 17 of that year, they soared by an incredible 1,000%. Cory Rellas, Justin Robinson, Nicholas Rellas, and Spencer Frazier are the backbone of the platform. Their genius move was to team up with local shops to bring booze right to their doorstep. Uber, with its eyes on expansion, bought Drizly for a huge sum of $1.1 billion in 2021. The deal included stocks and cash. This happened as Uber explored new business areas because fewer people were hailing rides.
Reasons Behind the Shutdown
Uber has chosen to close Drizly for a few reasons:
- Strategic Focus: Uber wants to bring all its delivery services – food, groceries, and booze – under the Uber Eats umbrella.
- Consumer Preferences: People seem to want everything in one app, and Uber Eats already delivers alcohol in 35 states and more than 25 countries.
- Business Redundancies: Getting rid of the overlap between Drizly and Uber Eats is aimed at being more streamlined.
Impact on Drizly’s Operations and Staff
Drizly used to be pretty big, running in 36 states and more than 1,500 cities. But its closure isn’t expected to make much of a splash for shoppers, since most folks who use Drizly also use Uber. Still, shutting it down means Uber will have to cut down on staff. They’ve said some workers from both Drizly and Uber who were helping out Drizly might lose their jobs, but they could have a shot at other roles at Uber.
Uber’s Broader Business Strategy
Uber has been focusing on getting bigger and doing more things, especially with deliveries. Deliveries, Drizly included, brought in almost a third of Uber’s total cash – that’s $9.92 billion – in the third quarter. Out of that, the delivery part made more than $2.93 billion. A part of growing was when Uber bought Postmates in 2020, which let them reach more people wanting food, drinks, and groceries dropped off at their doorstep.
Uber Eats’ Expanding Role
Mixing Drizly’s services into Uber Eats is a smart move to make the platform more appealing and to improve how users interact with it. In many places around the world, Uber Eats can already deliver alcohol, which is a smooth switch for people who’ve used Drizly before.
Consumer and Regulatory Response
Services that deliver alcohol, like Drizly, became more popular when the pandemic hit and the rules changed. A bunch of places either changed or put a pause on their laws so alcohol could be delivered to homes. This helped businesses like Drizly grow big. Now that Drizly’s joining Uber Eats, we’ll have to wait and see what happens with the laws about delivering alcohol.
Future of Alcohol Delivery Services
Drizly’s shutdown as an independent service is a big change in alcohol delivery. Uber’s choice to do this shows a move in the delivery business towards joining together and improving efficiency. What we’re looking at now is how Uber Eats will use what Drizly knows and its customers to improve its place in this tough market.
Uber ending Drizly may feel like the end, but it’s the start of something new for alcohol delivery. Uber plans to mix these services into one app, making things simpler for users and better for their operations. As changes keep happening, Uber Eats is likely to get ahead in delivering alcohol.
For more information on Uber’s services and plans, visit their official website at Uber.