Amazon Launches Free UK Food Delivery, Grubhub Stock Drops 5%
Amazon cranked up the pressure on food delivery services Grubhub, DoorDash and Uber Eats Wednesday (Sept. 15) with a partnership that will provide free food delivery through Deliveroo Plus for Prime members in the U.K., TheStreet reported.
That launch caused Grubhub’s stock price to dip 90 cents Wednesday from $18.08 to $17.18, a 5% overall dip in the share price.
U.K. Prime members will have free access the silver tier of Deliveroo Plus, giving them free deliveries on orders of more than 25 pounds (almost $35). Deliveroo charges 3.49 pounds (almost $5) for Deliveroo Plus service, meaning U.K. Prime members will see a 12-month savings of more than 40 pounds (more than $55) per year, the report stated.
Last week, Grubhub, DoorDash and Uber Eats sued New York City over legislation that would license them and cap the commissions they can charge restaurants.
Read more: Restaurant Aggregators Sue NYC Over Fee Caps in Move to Shape the Future of Delivery Economics
The companies alleged the law “interferes with freely negotiated contracts” and call the measure “irrational,” arguing that it is “driven by naked animosity toward third-party platforms.”
The law began as a short-term measure during lockdown in April, at which time Council Member Mark Gjonaj commented, “This landmark legislative package will protect our small businesses from unfair practices that threaten their existence when they are the most vulnerable.”
In August, Deliveroo finally returned to its initial public offering (IPO) price (390 pence, or about $5.40), almost five months after the company struggled out of the gates in public trading in March, completing a surge of more than 70% since it bottomed out in April.
See more: Deliveroo Stock Price Returns to IPO Levels After Long Climb Back
On Wednesday, DoorDash filed a federal lawsuit against New York City, saying it’s violating the law by requiring food delivery services to share consumer data with restaurants. The lawsuit comes six days after the fee cap provision suit.
Read more: DoorDash Continues NYC Legal Battle With New Lawsuit