Under pressure on earnings after a big loss last year, food distribution company Grubhub on Wednesday struck a deal with Amazon that will offer restaurant delivery services at no charge to Amazon Prime members.
The premium service called Grubhub+ has been free for Amazon Prime customers since Wednesday. Here’s what we know.
What is Grubhub+?
Grubhub+ is a membership service launched in 2020 that costs $9.99 per month. It cancels delivery charges for orders totaling $12 or more before taxes, tips, and other fees. Amazon Prime members (including those who are already Grubhub+ members) get a free year of Grubhub+.
Customers should then click “Activate Free Grubhub+”. On the next screen, Prime members will be prompted to sign in or create an account using the Grubhub screen. Users can also log in the same way if they have a Seamless or Seamless+ account.
After agreeing to the Terms of Service and agreeing to share proof of their Prime membership with Grubhub, customers can take advantage.
Why was this deal made?
The pandemic initially gave foodservice companies like Grubhub a boost, with the company suffering losses — about $410 million — in 2021. But the lifting of pandemic restrictions across the country caused demand for restaurant deliveries to drop.
The deal with Amazon, which already owns a stake in ailing UK grocery delivery service Deliveroo, will give Grubhub more cash flow in 2023.
Although this agreement with Amazon is only for one year, it automatically renews annually unless Amazon or Grubhub opts out.