Amazon Grubhub Deal Pressures DoorDash, Uber Eats as Delivery Market Shrinks

In an attempt to expand its user base, food delivery service Grubhub has been branching out and adding more promotional opportunities, such as its May promotion which offered New Yorkers a “free lunch.”

However, the company is no longer on the top of its field, as The Wall Street Journal reported Sunday (July 17). The May promotion offered users ordering through Grubhub a $15 voucher, and the amount of orders placed ended up overwhelming the company’s system.

Per the report, the promotion resulted in as many as 6,000 takeout and delivery orders per minute during the offer. However, the company is now lagging behind delivery rivals DoorDash and Uber Eats. Grubhub also faces an uncertain status with its parent company Just Eat Takeaway, which is considering selling Grubhub roughly a year after first acquiring it.

The Journal wrote that there were 200,000 new diners who downloaded Grubhub’s app for the first time during the free lunch promotion in New York. It also processed over 400,000 orders that day.

Grubhub is continuing to examine other deals and promotions, and recently made a deal with Amazon that links part of Grubhub’s delivery service with Amazon’s Prime program, which has over 200 million members. Sources told the Journal that the deal resulted in Grubhub gaining around 2 million new users.

See also: Grubhub Deal Gives Amazon New Ammo in Walmart Food Fight

The delivery service has also been signing agreements with various chains, including one with Chili’s parent Brinker International and another between Just Eat and McDonald’s earlier in the year.

According to the report, there are still challenges afoot, including the fact that food delivery has been slowed in growth since the height of quarantine in 2020.

PYMNTS wrote in late June that Just Eat Takeaway was still holding onto Grubhub for now. The report noted that Just Eat wasn’t “immediately offloading” the other company, according to Grubhub CEO Adam DeWitt.

Read more: Just Eat Takeaway Holds Onto Grubhub as Aggregators Lose to Direct Ordering

DeWitt said it was mostly about “finding a way to help us grow” as opposed to being about the sale. This came after Just Eat Takeaway said it wanted to sell the company, amidst reports that the company might lose £4.8 billion compared to how it acquired the company.