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The service that provided beer, wine and alcohol to countless Americans during the pandemic will deliver its final bottle this spring. Uber confirmed Tuesday that it will shut down Drizly, the alcohol delivery service it acquired in 2021, at the end of March.
“After three years of Drizly operating independently within the Uber family, we have decided to close the company and focus on our core Uber Eats strategy of helping consumers eat almost everything – from food to groceries to Alcohol – get it all in a single app,” said Pierre Dimitri Gore-Coty, senior vice president of delivery, in a statement to The Washington Post.
Uber shares rose slightly on Tuesday after news of Drizly's closure made its rounds online.
The decision to close Drizly appears to be based on corporate layoffs and convenience. Consumers, an Uber spokeswoman said, prefer a single app when ordering delivery, and the alcohol category on Uber Eats has already doubled globally in the last year. The Uber Eats app can deliver alcohol to 35 states and more than 25 countries around the world, she said.
The change apparently won't cause much distress for Drizly consumers. The majority of Drizly users, a spokeswoman said, also have Uber accounts. As of the third quarter of 2023, Uber had 142 million active monthly users.
Founded in 2012 by Cory Rellas, Justin Robinson, Nicholas Rellas and Spencer Frazier, Drizly works with retailers to deliver alcohol directly to consumers. The Boston-based company's sales surged in the early days and months of the pandemic as Americans increased their drinking habits while stuck at home. In 2020, Drizly reported that its revenue increased 350 percent compared to the previous year. Sales peaked on April 17, 2020, with a reported increase of 1,000 percent compared to sales the previous year.
Uber acquired Drizly in 2021 as part of the San Francisco-based company's strategy to diversify its business as demand for ride-sharing slumped during the pandemic. Uber spent $1.1 billion in cash and stock for the acquisition.
Over the years, Drizly ran into trouble for security breaches dating back to 2018. The Federal Trade Commission said in 2022 that Drizly and its former chief executive, Cory Rellas, “failed to implement adequate safeguards to protect the personal information they collected and stored.” A year ago, the agency ordered Drizly “to “To destroy any personal information collected that is not necessary to provide products or services to consumers, and to refrain from collecting or retaining personal information unless necessary for specific purposes.”
At its peak, Drizly delivered alcohol 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, she said Uber will eliminate some Drizly jobs, as well as jobs at Uber that support Drizly, once the alcohol delivery business ends in March. Some of those employees will be offered jobs at Uber depending on the company's needs, she said.