Uber recently announced it will shut down alcohol delivery service, Drizly, in March 2024. This decision comes after Uber acquired Drizly in early 2021 for $1.1 billion. Drizly’s closure marks a notable shift in Uber’s business strategy, particularly in the realm of delivery services.
Why is Uber shutting down Drizly?
Cybersecurity Concerns:
- The 2020 Hack: In 2020, Drizly suffered a major cybersecurity breach, exposing the personal information of approximately 2.5 million customers. This incident involved hackers initially using Drizly’s servers for cryptocurrency mining–perhaps the most 2020 reason to hack something–and led to the invasion of Drizly’s corporate GitHub account where users’ information was stored.
- Neglected Security Flaws: After the breach, an FTC investigation discovered that Drizly’s executive team, specifically CEO James Cory Rellas, was aware of certain security flaws but failed to address them adequately over two years. This oversight led to an FTC order restricting Drizly’s data collection and retention capabilities, significantly impacting its potential to profit from selling data. The news came out after Uber had acquired them.
Uber’s Strategic Focus:
- Almost, Almost Anything: Uber is focused on creating a singular app to offer a wide range of delivery options, from groceries to take-out to alcohol. If you’ve watched an NFL game or listened to a podcast in the past few months, you’ve heard over and over that Uber delivers “almost, almost anything,” an earworm of an ad that admittedly gets their point across.
- Other Shutdowns: This one-app-to-rule-them-all strategy is evident in Uber’s recent decision to also shut down Cornershop, a grocery delivery service. The aim is to consolidate various delivery services into the UberEats platform, enhancing customer convenience and operational efficiency.
Uber’s acquisition of Drizly in 2021
Uber acquired Drizly during the peak of the COVID-19 pandemic. During this time, delivery services like Drizly, Postmates, and Saucey experienced a surge in demand while the ride-sharing aspect of Uber’s business saw a decline. No doubt, it was harder to convince users to get into a tight space with a stranger while lockdown orders were in place.
However, as Axios noted, Drizly’s operational model was an odd match for Uber’s business model. The service functioned independently without its own contracted delivery workforce, unlike Uber’s integrated service approach.
What’s next for Uber and Drizly?
Looking ahead, Uber’s primary focus will be on expanding and enhancing its UberEats platform. The vision is summed up by Uber’s Senior Vice President of Delivery, Pierre Dimitri Gore-Coty, saying the “core UberEats strategy helping consumers get almost anything – from food to groceries to alcohol – all on a single app.”
The decision to integrate Drizly’s services into UberEats, rather than maintaining it as an independent entity, reflects this future-oriented strategy.
Paying respect to Drizly on the way out, Gore-Coty said, “We’re grateful to the Drizly team for their many contributions to the growth of the BevAlc delivery category as the original industry pioneer.”
Conclusion
Uber’s decision to shut down Drizly is a strategic move to streamline its services and focus on a unified, all-encompassing delivery platform. While this marks the end of Drizly as a standalone service, it represents a significant step in Uber’s broader vision of becoming a one-stop-shop for all delivery needs.
For what it’s worth, Saucey is was a competing alcohol delivery service with Drizly. We have maintained independence and will continue delivering alcohol (and tobacco) products throughout the country. To try us out, check out our website or app, enter your address, and browse options available in your area.
Use code DRIZLY5 for $5 off your next order.
Offer valid until 2/1/24.
