Uber to expand presence in food delivery market with acquisition of alcohol ecommerce platform Drizly

US – American technology company Uber is acquiring on-demand alcohol platform Drizly for about US$1.1bn as the ride-share company looks to expand delivery services that have flourished during the pandemic.

Founded in 2012, Drizly is an on-demand alcohol marketplace that currently operates a delivery service in more than 1,400 cities across a majority of US states.

 The company partners with thousands of local merchants to provide customers with a variety of beer, wine and spirits.

Upon completion of the transaction, Drizly will become a wholly-owned subsidiary of Uber and its marketplace will eventually be integrated within the Uber Eats app, while also maintaining a separate Drizly app.

Under Uber ownership, Drizly will be able to benefit from the company’s  technology and consumer base, while delivery drivers will reportedly have more ways to earn.

Drizly will also adopt Uber’s rewards and subscription programmes offering greater value to consumers.

Uber says the Drizly acquisition will allow the company to offer beer, wine and spirits in the majority of US states in addition to the groceries, package and prescription delivery it recently launched in some regions.

Not included in the deal is Lantern, a cannabis delivery service currently operating in Boston and Detroit. It was launched by Drizzly in May 2020.

In an interview with CNBC, Uber chief, Dara Khosrowshahi, said the company was currently not actively interested in cannabis delivery, but could be more open down the road.

The deal is the latest move by Uber as it looks to expand its platform and follows its acquisitions of food delivery service Postmates and grocery delivery service Cornershop.

“Wherever you want to go and whatever you need to get, our goal at Uber is to make people’s lives a little bit easier. That’s why we’ve been branching into new categories like groceries, prescriptions and, now, alcohol,” said Uber CEO Dara Khosrowshahi.

The deal – which is subject to regulatory approval and customary closing conditions – will be paid in both stock and cash and is expected to close within the first half of 2021.

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