Uber stock rose slightly on Tuesday after news of Drizly’s closure began making its way across the Internet.
The decision to close Drizly appears to be based on redundancy and rest. An Uber spokeswoman noted that consumers prefer to use one app when ordering rides, and the alcohol category on Uber Eats has already doubled globally in the past year. She said that the Uber Eats app has the ability to deliver alcoholic beverages to 35 states and more than 25 countries around the world.
Obviously, this shift won’t cause much grief for Drizly consumers. The majority of Drizly users also have Uber accounts, a spokeswoman said. As of Q3 2023, Uber had 142 million monthly active users.
Drizly was founded in 2012 by Corey Rellas, Justin Robinson, Nicholas Rellas, and Spencer Fraser, with the retailer delivering alcohol directly to consumers. The Boston-based company’s sales skyrocketed during the early days and months of the pandemic, when Americans increased their drinking habits while stuck at home. In 2020, Drizly reported that its sales increased by 350 percent compared to the previous year. Sales peaked on April 17, 2020, with a 1,000 percent increase over sales the previous year.
Uber acquired Drizly in 2021 as part of the San Francisco-based company’s strategy to diversify its business while demand for ride-hailing stocks declined during the pandemic. Uber committed $1.1 billion in cash and stock to the acquisition.
Over the years, Drizly has gotten into trouble for security breaches dating back to 2018. The FTC said in 2022 that Drizly and its former CEO Corey Rillas “failed to establish reasonable safeguards to secure the personal information it collected.” And store it.” A year ago, the agency ordered Drizly to destroy “personal data it has collected that is not necessary to provide products or services to consumers and it must refrain from collecting or storing personal information unless it is necessary for specific purposes.”
At its peak, Drizly delivered alcoholic drinks to 36 states and more than 1,500 cities, including New York, Los Angeles, Houston, Atlanta and Washington. Many jurisdictions have had to change or suspend their laws to allow alcohol delivery during the pandemic.
It’s not clear how many employees work at Drizly, but an Uber spokeswoman said there are no immediate layoffs. However, it said Uber will eliminate some Drizly jobs, as well as jobs at Uber that support Drizly, once its alcohol delivery business ends in March. Some of these employees will be offered jobs at Uber based on the company’s needs, she said.