Uber shuts down Drizly, an alcohol delivery startup it bought 3 years ago for $1.1 billion

Uber is finally moving away from the alcohol delivery business, concluding its billion-dollar experiment with Drizly. The ride-hailing giant announced its decision to close down the Drizly platform by March, according to an exclusive report from Axios.

Having acquired Drizly for $1.1 billion three years ago during a time when doorstep deliveries were on the rise, Uber faced challenges as the growth in the delivery market slowed down. Complications with regulators over user data management further exacerbated the situation.

Pierre-Dimitri Gore-Coty, Uber’s SVP of Delivery, shared with Axios that the company is now prioritizing Uber Eats and concentrating on offering consumers a comprehensive range of services on a single app, spanning from food and groceries to alcohol. Drizly had already laid off 100 employees the previous year, with some of its features integrated into Uber Eats.

The issues with Drizly began in 2020 after Uber’s acquisition when a data breach affecting 2.5 million users was revealed. It was reported that Drizly and its former CEO were aware of a security vulnerability for two years but failed to address it. The Federal Trade Commission (FTC) discovered this information after Uber’s acquisition, leading to restrictions on the types of customer data Drizly could collect and store.

Uber, emphasizing its commitment to the core Uber Eats app, downplayed its association with Drizly in several press releases. This move mirrors a trend seen elsewhere, as companies like Google scaled back Fitbit’s product team after acquiring the wearable tech brand for $2.1 billion in 2021, redirecting focus to their own product development.

Founded in 2012 by Cory Rellas, Justin Robinson, Nicholas Rellas, and Spencer Frazier, Drizly was an e-commerce alcohol marketplace providing a wide selection of beer, wine, and spirits. Operating in 1,400 cities, Drizly partnered with retailers to bring their products online, offering consumers a personalized and transparent shopping experience.