Amazon.com Inc. today announced a partnership with Just Eat Takeaway.com N.V., a publicly traded company that operates more than a half dozen food delivery platforms.
The partnership focuses on Just Eat Takeaway’s Grubhub subsidiary. Grubhub, which became part of the company through a $7.3 billion acquisition last year, operates one of the most popular food delivery platforms in the U.S. It competes with services such as Uber Technologies Inc.’s Uber Eats.
Grubhub offers a subscription service called Grubhub+ that waives delivery fees across many purchases. The service also offers other types of discounts. Thanks to the newly announced partnership with Amazon, Grubhub+ will become available through Amazon’s Prime membership program.
Users with a Prime subscription will receive free one-year access to Grubhub+, the companies stated. The integration will waive delivery fees on many restaurant orders as well as provide access to the other discounts that Grubhub+ offers.
Amazon’s partnership with Just Eat Takeaway also includes other components. Amazon is receiving the option to buy a 2% stake in Grubhub and will gain the ability to purchase another 13% stake if certain performance conditions are met. Those conditions relate mainly to the “number of new consumers delivered through the commercial agreement”, according to Just Eat Takeaway.
Just Eat Takeaway anticipates that the partnership will help grow consumer adoption of the Grubhub+ subscription service. Furthermore, the company projects that the partnership will become accretive to Grubhub’s earnings and cash flow accretive next year.
The partnership comes a few months after Just Eat Takeaway announced plans to explore a sale of Grubhub. The company stated today that it’s continuing to explore a partial or full sale of the subsidiary.
“I am incredibly excited to announce this collaboration with Amazon that will help Grubhub continue to deliver on our long-standing mission to connect more diners with local restaurants,” said Grubhub Chief Executive Officer Adam DeWitt. “Amazon has redefined convenience with Prime and we’re confident this offering will expose many new diners to the value of Grubhub+ while driving more business to our restaurant partners and drivers.”
Amazon previously inked a similar partnership with food delivery provider Roofoods Ltd, which does business as Deliveroo. Deliveroo offers a subscription service called Deliveroo Plus as part of its platform that waives delivery fees on many purchases. Last year, Prime members in the U.K. and Ireland received free one-year access to the subscription service.
The Prime membership program is an important component of Amazon’s growth strategy in the e-commerce market. The number of consumers using the program, which offers free shipping, discounts and other benefits, passed 150 million in January 2020. Prime’s user base reached 200 million consumers less than a year later.