Grubhub-Amazon deal reheats a half-baked idea

2 minute read

An Amazon delivery worker pulls a delivery cart full of packages during its annual Prime Day promotion in New York City, U.S., June 21, 2021. REUTERS/Brendan McDermid

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LONDON, July 6 (Reuters Breakingviews) - (AMZN.O) is using Just Eat (TKWY.AS) as its U.S. version of Deliveroo (ROO.L). The $1.2 trillion e-commerce giant last year struck a deal to offer its Prime subscribers temporary membership of Britain’s $2 billion food delivery outfit, in which it had a stake. On Wednesday $3 billion Dutch rival Just Eat Takeaway said it would do something similar in the United States, with Amazon taking the option of acquiring up to a 15% stake in its American arm Grubhub.

Amazon had over 170 million Prime members in the United States as of 2021, according to Consumer Intelligence Research Partners data. That traffic could now head to Grubhub. Accordingly, shares of Just Eat Takeaway jumped 21% on Wednesday morning, while shares of New York-listed rivals DoorDash (DASH.N) and Uber Technologies (UBER.N) dropped between 1% and 5% in morning trade.

The catch is that Deliveroo’s deal hasn’t obviously boosted its UK market share thus far, and Amazon has seen the value of its stake slump by 75% since August 2021. The enthusiastic share price response may instead reflect the hope that Amazon eventually swallows Grubhub whole. (By Karen Kwok)

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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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Editing by George Hay and Streisand Neto

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