Amazon shoppers can now order restaurant delivery from Grubhub without leaving the Amazon app.
The new feature is part of a deepening relationship between the food delivery company and the e-commerce giant, which now holds 7% of Grubhub's shares.
It also marks a major win for Grubhub, which has fallen behind delivery competitors in recent years.
The two companies first partnered in July 2022 to offer Amazon Prime members 12 months of free access to Grubhub’s membership program, Grubhub+. The new agreement unveiled Thursday drops the 12-month deadline, making Grubhub+ an ongoing perk for Prime members.
The more tight-knit arrangement is expected to give Grubhub and its restaurant partners a boost by putting them in front of the hundreds of millions of people who shop on Amazon. That means more eyeballs and incremental business for operators, said Grubhub CEO Howard Migdal in an interview.
Amazon already owned a 4% stake in Grubhub. The new agreement gives Amazon options for an additional 3% stake Thursday and another 1% in a year, Grubhub owner Just Eat Takeaway.com said in a statement on Thursday. It will have the opportunity to increase its share to 18%, depending on the performance of the partnership and the number of orders.
Migdal declined to say exactly how much business the Prime partnership has yielded for Grubhub. But he said it has been meaningful, noting that it has been the most successful third-party benefit Amazon has ever offered to Prime members. And yet many people still don’t know about it.
“The reality is, awareness of the partnership versus the rest of the Amazon Prime universe is incredibly low,” he said. Grubhub is betting that owning some real estate on the world’s biggest shopping site will change that. “There’s no better way to drive awareness than with a partnership with Amazon.”
Starting today, customers can access Grubhub via Amazon.com and the Amazon Shopping app under a header labeled “Grocery and Dining.” They'll order within Amazon, but the process will otherwise mirror the Grubhub app experience. For restaurants, orders will appear like any other Grubhub order and will continue to be fulfilled by Grubhub couriers.
The news comes amid a number of changes at Chicago-based Grubhub, which has fallen to a distant third behind DoorDash and Uber Eats in the U.S. restaurant delivery race.
Late last year, the company revamped Grubhub+ in an effort to give members more value. For $10 a month, they now get not only free delivery, but also reduced service fees, 5% cashback on pickup orders, and exclusive offers. The subscription saves customers an average of $300 a year, Migdal said.
Grubhub has also lowered its service fees in 14 major markets and has improved its speed and accuracy. Its average delivery time is 32 minutes, which Migdal said is the best in the business. And it has worked to increase its selection and now lists more than 375,000 businesses nationwide.
CORRECTION: An earlier version of the story said that Amazon owned 3% of Grubhub's shares. As of Thursday, it owns 7% with the possibility to own 18% in the future.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.