Uber has made a significant move by deciding to shut down its alcohol delivery service with one of its beverage partners, Drizly, which it acquired for a whopping $1.1 billion three years ago. The decision is expected to have severe impacts on the reputation of both companies, resulting in reduced revenue generation and other potential times. However, the demolishing of this contract has astonished the world.
Reasons Behind Closure
In 2020, Uber went to the heights of glory when it announced the acquisition of Drizly, which was a well-established alcohol delivery app at that moment. The collaboration of this beverage company with Uber was a strategic move primarily aimed at expanding Uber’s services beyond the mark to make sure that it earns a good name in the market. The company has planned to integrate Drizly into its Uber Eats ecosystem.
Despite Uber has acquisition of Drizly, it continued operating as an independent company. It kept its identity and business model while serving millions of customers across various areas. Nevertheless, the plan of integration into the Uber Eats ecosystem is never carried out. Till the last moment, Drizly has worked as a standalone service to provide consumers with high-quality alcohol and beverages in a seamless, convenient, and reliable manner.
As 2024 comes, Uber has made a crucial decision to end the Drizly acquisition, first reported on Axios, to improve its functional capabilities further and overcome other marketing challenges. Pierre Dimitri Gore-Coty, who is currently the Senior Vice President of Delivery at Uber, has revealed that the decision to shut down this deal is purely meant to focus more on the company’s core services to ensure that customers can get everything from food to grocery on a single platform. The agreement with Drizly will come to an end by March.
Additionally, Gore-Coty thanked Drizly for being a part of Uber and acknowledged their efforts and contributions toward the success of the BevAlc delivery category on this platform.
Upcoming Challenges for Drizly
While it is before time to say anything about the upcoming challenges, the company has faced enormous challenges before its acquisition by Uber. In 2020, Drizly faced a data breach problem, which resulted in orders from the Federal Trade Commission to delete all unnecessary personal data. Further, FTC compelled Drizly to implement high-end security systems to streamline its services in a more secure environment.
Uber Eats has been one of the most popular solutions for millions of users in the food and beverage delivery world. As per the latest estimation, the platform provides alcohol delivery services across 35 US states and 25 countries situated in different areas of the globe. The end of the agreement with Drizly will result in more customer base for Uber Eats. Ultimately, the company will be able to deal with its customers more effectively and enhance their experience to bring more sales and generate heavy revenue.