bicycle courier of Uber eat (Photo: Robert Anasch, Unsplash)
19 February 2021

Uber buys alcohol delivery app Drizly for up to USD 1.1 billion

USA | A cool price for a piece of technology. Uber said on 2 February 2021 that it has acquired the alcohol delivery service Drizly, the latest purchase for the ride-hailing company, as it seeks to diversify its business after a pandemic-related decline in rides. Drizly’s sales boomed in 2020, growing more than 330 percent, it was reported, after many consumers stopped dining out and redirected their dollars towards take-aways and deliveries.

Launched in Greater Boston in 2013, Drizly has become the leading on-demand alcohol delivery service in the US, and is currently available in 1,400 cities. Although Drizly does not disclose financial figures, it said that its average dollar sales order went up to USD 67 in 2020. For example, in Boston, says the website bostoneater.com, you pay, like, USD 42 for ten beers.

Overcoming hurdles and restrictions

Drizly works with thousands of local retailers to provide consumers with a vast selection of beers, wines, and spirits at competitive, transparent prices. It has mastered the complexities of selling alcohol online in the US, where there are specific rules on who can buy it (only punters of legal drinking age), which types of alcohol, and where. The laws vary by state, with some mandating rules on the days or hours alcohol can be sold, and some only letting chains vend alcohol.

Drizly is different from other third-party delivery apps, in that it does not deliver anything itself. It merely provides stores with the technology. Individual stores then hire their own fleet of drivers to make the deliveries.

Uber will incorporate the Drizly app into its Uber Eats service, and continue to operate Drizly as a stand-alone app. Lantern, a cannabis delivery service owned by Drizly, that operates in California, Massachusetts and Michigan, is not included in the deal.

Branching out into other services

Uber expects that more than 90 percent of the deal will be made through Uber’s stock and the balance paid in cash to Drizly’s investors.

The deal follows Uber’s recent acquisitions of Postmates, a food delivery service, for USD 2.7 billion, and Cornershop, a grocery delivery company. Uber also joined with Nimble to deliver prescriptions in some markets, it was reported.

After rapid consolidation, the app-based food delivery industry in the US now has only three major players: DoorDash, Uber Eats and Grubhub.

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