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The ridesharing company Uber continues to build out its stable of food and other delivery services by announcing that it would be buying alcohol delivery service Drizly. The deal is reportedly worth $1.1 billion in stock and cash.
Founded in 2012, Drizly is an online delivery storefront for existing local liquor stores and went onto become the leading on-demand alcohol delivery service in the U.S. The company partners with local sellers and then enlists delivery drivers to handle the delivery. The app is currently available in 29 states and over 1,400 cities across the country. In California, some of the cities the app services include Los Angeles, San Diego, and Anaheim.
Throughout the pandemic, Drizly reportedly had more than 300% growth in the past year.
Uber’s eventual plan is for Drizly’s marketplace of beer, wine, and liquor to be integrated into the existing Uber Eats application, giving Uber users a one-stop shop for both food and drink deliveries and expanding their market reach. However, the existing Drizly app will continue to be available.
This deal marks the latest delivery-focused move on Uber’s part in recent months. Last year, Uber acquired the food delivery service Postmates $2.65 billion. The company announced the deal a few months into the pandemic, as Eats looked like the most secure leg of its operation. Postmates is currently the fourth major meal delivery company in the U.S., and it earned 7% of the country’s meal delivery market in October. With Postmates’s customers, Uber Eats can pull ahead in Los Angeles. As of October 2020, Postmates is the top food delivery service in the city, according to data from Second Measure. Meanwhile, Uber Eats lags behind DoorDash and is on par with Grubhub.
It’s because of this that the acquisition of Drizly fits perfectly into Uber’s expanding delivery-focused approach. Add the fact that the company had a big win with the passage of Prop. 22 after pouring millions in support, and the deal makes even more sense. That lobbying campaign was done to avoid classifying its workers as employees, which all these new delivery services are all businesses that rely on contract workers.
The Uber and Drizly deal is expected to close sometime in the first half of 2021.