Amazon is shutting down its restaurant delivery service in the United States, a 4-year-old business that has failed to take off in the face of fierce competition from Uber Eats, DoorDash and others.
The service, called Amazon Restaurants, offered delivery to more than 20 cities in the United States. It expanded to the UK, but Amazon shut down the service there late last year. The shutdown of the U.S. company, which was first reported by tech news site GeekWire, will take place on June 24.
Still, Amazon.com Inc. has shown interest in home meal delivery. Last month he bought a stake in UK food delivery company Deliveroo, whose kangaroo logo is commonly used on bikes and scooters in Britain.
Amazon Restaurants was a small player in the United States, taking around 2% of the market, according to Jeremy Scott, food and restaurant analyst at Mizuho.
He said Amazon did not promote the delivery service enough and did not make deals with the big fast food chains. Uber Eats, for example, delivers Big Macs from McDonalds; DoorDash has a partnership with Wendy’s; and Grubhub delivers Taco Bell chalupas and buckets of fried chicken from KFC.
With Amazon out of the restaurant delivery business, analysts said others could pick up the crumbs. Shares of Grubhub Inc. climbed 7% on Tuesday, for example.
But Scott believes Amazon, which also owns the Whole Foods grocery chain, isn’t completely abandoning the food delivery business. âClosing the platform doesn’t necessarily mean Amazon won’t ultimately invest in space,â he said.