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Uber expands into alcohol delivery with acquisition of Drizly for $1.1 billion

The ride-hailing business plans to integrate Drizly into its Uber Eats app

The logo for Uber appears above a trading post on the floor of the New York Stock Exchange. (Richard Drew/AP)
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SAN FRANCISCO — Uber said Tuesday it has acquired alcohol delivery service Drizly, the latest purchase for the ride-hailing company as it aggressively diversifies its business after a pandemic-related plummet in rides.

The companies announced the $1.1 billion deal in a joint news release, explaining that Drizly would maintain its marketplace but that it would eventually also appear in the Uber Eats app.

Uber said Drizly is the “leading on-demand alcohol marketplace in the United States” with a presence in more than 1,400 cities in a majority of U.S. states. It is designed to be “fully compliant” with local regulations in those places, Uber said.

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The Washington Post reported last year that Uber was facilitating alcohol deliveries without ID’ing recipients, as couriers in some cases left to-go-cocktails at the door. Restaurants were taking advantage of new to-go-alcohol rules in markets where Uber did not allow alcohol deliveries in its app. Regulators from the California Department of Alcoholic Beverage Control investigated and found that food delivery apps had been “routinely delivering alcoholic beverages to minors,” though it did not name specific services.

Since then, Uber has rolled out alcohol delivery further, enabling the app in new markets to ID recipients at the door.

Uber’s acquisition of Drizly aims to make alcohol delivery a permanent fixture on its app.

The deal follows an earlier pandemic-driven move to buy food delivery app Postmates in July, when the companies announced a $2.65 billion all-stock deal that consolidated the app-based food delivery industry into three major players: DoorDash, Uber and Grubhub.

Uber has historically absorbed the services it acquires into its main apps, drawing on their consumer data and customer bases while relying on its massive market and streamlined user interface to drive up sales.

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Uber touted what it sees as the numerous advantages arising from the acquisition: integrating Drizly into its routing system and giving it exposure to Uber’s massive customer base, while giving drivers more delivery opportunities and consumers more options in its app.

Uber absorbed e-bike service JUMP into its app after acquiring it in 2018, proceeded to sideline or lay off much of its staff, and then offloaded it last year.

More recently Uber laid off more than 180 Postmates employees, the New York Times reported, about 15 percent of that app’s workforce following the acquisition it announced in July.

Uber CEO Dara Khosrowshahi said in a statement that Uber could accelerate Drizly’s “trajectory by exposing Drizly to the Uber audience and expanding its geographic presence into our global footprint in the years ahead.”