Uber Technologies Inc UBER is shutting down its alcohol delivery app, Drizly, three years after acquiring it for $1.1 billion.
During the pandemic, Drizly had become North America’s largest online alcohol marketplace. However, Uber has announced that the service will cease operations by the end of March 2024.
Initially functioning as an independent app, Drizly’s marketplace eyed integration into Uber Eats, CNN reports.
Pierre Dimitri Gore-Coty, Uber’s senior vice president of Delivery, stated that the decision aligns with Uber’s strategy to streamline consumer access to various products, including food, groceries, and alcohol, through a single app, Uber Eats.
This move is part of Uber’s broader effort to consolidate its product delivery services, which also saw the sunsetting of its grocery shopping app, Cornershop. Nevertheless, groceries and alcohol will continue to be available on Uber Eats.
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Gore-Coty thanked the Drizly team for pioneering the beverage alcohol (BevAlc) delivery category. The closure of Drizly comes as Uber transitions from its pandemic-era strategy, which saw a decline in its core ridesharing business and a surge in delivery services.
Uber had also acquired Postmates for $2.65 billion to enhance its delivery segment shortly before purchasing Drizly.
Recently, Uber’s ridesharing business has shown signs of recovery, with the company reporting third-quarter gross bookings that exceeded expectations.
In November, Uber disclosed an 11% year-on-year increase in its revenue for the third quarter of FY23, reaching $9.29 billion, which fell short of the expected $9.52 billion. The company’s GAAP EPS stood at $0.10, below the consensus estimate of $0.12.
Breaking down the revenue streams, Mobility saw a 33% rise to $5.07 billion, Delivery climbed 6% to $2.94 billion, while Freight experienced a 27% decline, totaling $1.29 billion.
UBER Price Action: Uber shares traded lower by 0.73% to $62.74 premarket on the last check Tuesday.
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