Amazon is getting out of the (crowded) restaurant food delivery game. According to Geekwire, Amazon will shut down Amazon Restaurants toward the end of this month. Amazon confirmed Geekwire’s story in a statement stating “As of June 24th, we will discontinue the Amazon Restaurants business in the US.”
Additionally, Amazon is shutting down its office lunch delivery service, Daily Dish, on June 14.
The closing of Amazon Restaurants in the U.S. follows its closure of restaurant delivery in the U.K. last year. It also comes at a time when tons of money is flowing into the restaurant delivery space. DoorDash raised an additional $600 million at the end of May (bringing its total amount raised to $2 billion), Uber, which has Uber Eats, just went public last month, and Postmates is about to IPO as well.
But the most interesting bit of relevant funding news came from Amazon itself, which was part of a recent $575 million fundraise by UK-based food delivery company Deliveroo. Firing up the speculation engine, it’s not hard to imagine a scenario where Amazon’s moola helps Deliveroo make a move into the U.S.
That could actually be the smarter play for Amazon. Shuttering Amazon Restaurants isn’t even that much of a surprise. Even though Amazon is a logistics powerhouse, delivering a burrito is different from delivering a book on burritos. In a recent survey of restaurant delivery market share, Amazon lagged far behind Grubhub, DoorDash, Uber Eats and Postmates. Combining Deliveroo’s strengths in food delivery with Amazon’s network and presence in the U.S. would be a win/win for both parties.
I mean, Amazon’s already got the delivery drones, let Deliveroo fill ’em up with burgers.