The encyclopedia · Strategy & Leadership · Strategic decision · 2015–2019
Amazon's restaurant delivery service gave up in 2019 after DoorDash and Uber Eats won
Amazon rolled restaurant delivery into Prime Now in 2015, then shut it down in June 2019 — a rare surrender to Grubhub, DoorDash and Uber Eats.
Amazon · 2019-06-24
What happened
Amazon launched Amazon Restaurants in late 2015 in Seattle, folded into the Prime Now app so Prime members could order restaurant meals alongside groceries. It expanded to more than 20 US cities and into London, tying the service to Prime as a member perk.
The business lived inside Prime Now, which was built for fast delivery of goods, not hot meals. Restaurant delivery is a thin-margin, logistics-heavy game, and Amazon was never the first name a hungry customer reached for. Rivals Grubhub, DoorDash, Uber Eats and Deliveroo subsidised their way to scale with discounts Amazon chose not to match.
Amazon ended its London restaurant delivery in November 2018, then on June 11, 2019 announced it was shutting the US service, ceasing operations on June 24, 2019. The company said a small fraction of employees were affected. It conceded the restaurant-delivery market to focus on the grocery hand it was already building in May, when it led a $575 million fundraising for Deliveroo.
Why it happened
- Undifferentiated entry: Amazon offered the same restaurant delivery everyone else did, so it gave customers no reason to think of it first.
- The economics never worked: hot-food delivery is thin-margin and logistics-heavy, far from what Amazon does best.
- Rivals out-subsidised it: Grubhub, DoorDash and Uber Eats spent to win scale, and Amazon declined to match the discounts.
- It was an add-on, not a strategy: inside Prime Now as a perk, it was never core enough to defend once the grocery push grew.
The lesson
Rolling a service into a platform is cheap; winning a market with poor economics and outspending rivals is not. If customers never think of you first, scaling just makes the loss bigger.
Aftermath
Amazon shut Amazon Restaurants in the US on June 24, 2019, saying affected employees could find new roles at Amazon or get help finding work outside the company. Shares barely moved, and the exit was read as a rare concession to Grubhub, DoorDash and Uber Eats as Amazon turned its attention to grocery delivery.
Sources
- TechCrunch, 11 June 2019 — Amazon Restaurants, the restaurant delivery service, is shutting down (service launched in 2015 in Seattle, expanded to 20+ US cities and London; London ended November 2018; US shutdown announced June 11 2019, ceased June 24 2019; 'a small fraction of Amazon employees affected')
- CNBC, 12 June 2019 — Amazon to shut its restaurant delivery service in the US (ends US restaurant food delivery on June 24, giving in to intense competition from Grubhub, DoorDash and Uber Eats; launched 2015 in Seattle, expanded to more than 20 US cities, then London where the program ended in November; Amazon led a $575M Deliveroo fundraising in May 2019)
spotted an error? The club wants to know.
More like this
Cinnabon dropped its Bachelorette collab over Taylor Frankie Paul's abuse probe
On the Border filed bankruptcy twice in 14 months — 150 locations to zero
Smokey Bones opened 128 BBQ restaurants — then FAT Brands bankruptcy closed all in 2026
Somewhere, someone solved the problem this company failed at. 2nd Opinion →
Comments · 0
Sign in to join the comments.