Uber Technologies (NYSE:UBER) has announced its decision to close down its Alcohol Delivery Service, Drizly, three years after acquiring it. The move is part of Uber’s strategy to concentrate on its core business, Uber Eats, which provides a comprehensive platform for consumers to access various services through a single app.
Apart from the business strategy shift, cybersecurity concerns may have played a role in the decision to shut down Drizly. In 2020, Drizly experienced a security breach that exposed information for approximately 2.5 million customers. Pierre-Dimitri Gore-Coty, Uber’s SVP of delivery, expressed gratitude to the Drizly team for their contributions to the growth of the beverage alcohol delivery category as the original industry pioneer.
Uber acquired Drizly in 2021 for $1.1 billion in cash and stock. Following the acquisition, Drizly’s marketplace was integrated into the Uber Eats app, and a separate Drizly app was also available. Drizly operates in over 1,400 cities across the United States.
Uber’s stock, which recently joined the S&P 500 Index, has shown strong performance, surging 116.4% in the past year, outpacing the S&P 500’s growth of 20.6%. Diversification has been a key strategy for Uber, moving beyond its core ride-sharing business into areas such as food delivery and freight.
The decision to shut down Drizly aligns with Uber’s focus on streamlining its offerings and concentrating on key sectors within its portfolio.
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