By Alyssa Lukpat
Uber said it’s shutting down Drizly, the alcohol-delivery service it acquired for $1.1 billion in 2021.
Drizly said Monday that it would accept its final orders in March.
Uber acquired Drizly as part of its foray into the delivery business after pandemic lockdowns boosted alcohol-delivery sales but the Boston-based company quickly faced challenges. Alcohol-delivery sales haven’t captured the U.S. booze market, remaining only a small portion of overall consumption.
“We’ve decided to close the business and focus on our core Uber Eats strategy of helping consumers get almost anything — from food to groceries to alcohol — all on a single app,” said Pierre Dimitri Gore-Coty, Uber’s senior vice president of delivery.
The Federal Trade Commission last year ordered Drizly to implement new data security measures after hackers stole information about 2.5 million customers in 2020.
Drizly has said it has millions of customers but Uber Tuesday declined to say exactly how many. Drizly, which said it operates in 36 states, didn’t immediately return a request for comment.
Founded in 2012, Drizly was one of the earliest companies to deliver alcohol. It aimed to disrupt the industry, raising millions from investors hoping to accelerate alcohol e-commerce. Drizly said it has proprietary ID technology that allows retailers to verify a customer’s age. The company has offered delivery services in the U.S. and Canada.
Drizly has functioned similar to food-delivery services, allowing customers to order booze online that a worker picks up and delivers from a store. The company said most deliveries are at a person’s doorstep less than an hour after being ordered. Drizly has maintained its own online platform since being acquired.
Uber said Monday that consumers prefer using a single app to get multiple types of products delivered. The company also runs Uber Eats, a competitor to food-delivery services like DoorDash and Grubhub. Uber in 2020 acquired food-delivery rival Postmates for $2.65 billion.
Uber has been trying to expand the number of services it can offer to people from their doorsteps. In addition to its food-delivery and ride-share businesses, the company last year began picking up return packages that customers needed to take to the post office. Uber has been delivering groceries since 2020 after acquiring Chilean startup Cornershop.
Write to Alyssa Lukpat at alyssa.lukpat@wsj.com