With the online restaurant delivery market growing ever more competitive, Amazon is discontinuing the service it started four years ago as an alternative to popular apps like Grubhub and UberEats.
Amazon Restaurants, which customers in nearly 200 cities in the United States use to order from local restaurants, will officially close on June 24. Amazon said on Tuesday that the move would allow the company, which owns Whole Foods, to focus on grocery delivery. A company spokeswoman said that only a small number of employees would be affected by the decision and that many of them had already found new jobs within the company.
Since it started in Seattle in 2015, Amazon Restaurants has struggled to gain a foothold in the restaurant delivery market. Together, UberEats, Grubhub and DoorDash control nearly 80 percent of the restaurant delivery business, according to the research firm Edison Trends.
“In the U.S., Amazon has seemed like a looming distant threat, but it was never competition,” said Miranda Lambert, a research analyst at Euromonitor International.
The restaurant delivery industry has grown quickly in recent years, as investors have poured hundreds of millions of dollars into companies that allow smartphone users to order takeout with a few taps on a screen. In two fund-raising rounds this year, DoorDash has accumulated $1 billion. In April, Postmates said it had added 1,000 cities to its service, bringing its total count to 3,500 as the company gears up for an initial public offering.
In 2016, Amazon opened an arm of its restaurant delivery operation in Britain, only to shut it down two years later