Amazon has announced several new perks for Prime members ahead of this month’s Prime Day, including free delivery from nearby restaurants. All U.S. Prime members will now have free access to a yearly Grubhub+ membership, which typically costs $10 per month.
The biggest technology company used to have its own restaurant delivery service in an attempt to create a homegrown competitor to UberEats, but the company eventually shut it down in the UK and US. This time he is teaming up with a well-known delivery service.
A partnership that will offer Amazon Prime members in the country a free Grubhub:
Amazon tried but eventually gave up on creating its own high-priced competitor to Grubhub and DoorDash in the US in 2019. UPS is its main subscription service. Today, the e-commerce giant and Just Eat Takeaway — the owner of Grubhub in the US — announced a partnership that will offer the biggest technology company Prime members in the country a free Grubhub+ membership for a year
Grubhub+ members get $0 for food delivery if their orders are over $12. They also receive rewards, including free food and discounts on their orders. Prime subscribers can activate their free Grubhub+ membership by going to the official perks page on Amazon , activating the offer, and then sharing their Prime status with a delivery service.
People who cancel their Prime membership will also lose access to their free year of Grubhub+, while those who stay will pay $10 per month for 12-month delivery service.
Amazon will also receive warrants on an additional 13% of Grubhub’s fully diluted common stock:
The commercial terms of the deal look like Amazon will get a stake in JET. Specifically, it will include a provision for annual renewal of the deal (just like a Prime subscription!) and that “an Amazon subsidiary will receive warrants (executable at a floor price) on 2% of fully diluted Grubhub common stock”.
It also notes that “Amazon will also receive warrants (executable at a formula-based price) on an additional 13% of Grubhub and delivery platform’s fully diluted common stock, vesting contingent on the fulfillment of certain performance conditions, principally the number of new consumers introduced through the “trade agreement.”, will be executed.” These figures are subject to change, but as of December 31, JET stated thatGrubhub’s gross assets were €6,521 million ($6.7 billion vs. $7.3 billion paid out in 2020) and its pre-tax loss for the 12 months ending that period was €403 million.
This partnership is part of a commercial agreement that the biggest technology company has entered into with Just Eat Takeaway.com, this food ordering, and delivery platform’s Dutch parent company. Under the agreement, Amazon company will receive share warrants worth 2 percent of Grubhub’s fully diluted total capital.
The Grubhub and delivery platform say it “continues to actively explore the possibility of a partial or full sale” of the company, but it remains to be seen if the biggest technology company will make an offer. For now, Grubhub expects this partnership to add more contributors to its subscription service.
At the same time, the company revalued its stake in Grubhub. Buying the company in 2020 for $7.3 billion was a major controversy, but options for the company were being considered in May of this year. Today, the company confirmed that this will be the case: “Together with its consultants, the company is still actively exploring the possibility of a partial or complete sale of this food ordering and delivery platform,” it said in a statement.
“I’m incredibly excited to announce this partnership with the biggest technology company, which will help Grubhub continue our long-standing mission of connecting more customers to local restaurants. The Amazon company has reimagined convenience with Prime, and we’re sure this offer will open up a lot of new visitors. Grubhub+ values while expanding business for our restaurant and driver-partners.”
This is not the first time the two companies have danced together:
This is not the first time the two companies have danced together. About a year ago, Amazon started offering a Grubhub+ subscription to Amazon Prime students for a year for free. It’s unclear how well this partnership went, although today’s news seems to be a continuation of that, so there’s a chance it was positive overall.
However, sometimes these dances are not so harmonious. In the UK, where Amazon has abandoned its original restaurant services, as in the US, the company has also returned to the restaurant delivery business in a similar partnership, but this time with JET rival Deliveroo, which is offering a free year of Deliveroo. Plus its a prime member of the country. As you may have guessed, Deliveroo Plus is Deliveroo’s version of the membership subscription/free shipping model.
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