Amazon partners with Grubhub: a red flag for Uber and DoorDash?

Amazon.com Inc (NASDAQ: AMZN) added food delivery to the list of services included in its “Prime” membership as it took a 2.0% stake in Grubhub on Wednesday.

How does it affect Uber and DoorDash?

The American multinational has the option to later grow that stake to 15% based on several performance factors. For “Prime” subscribers in the United States, the deal means one-year free access to Grubhub membership programme.

The news sent Uber and DoorDash shares down roughly 5.0% each, but Bernie McTernan – Senior Analyst at Needham & Company said on CNBC’s “TechCheck”:

What the partnership means for Grubhub

Grubhub has had its value shrink from $7.0 billion to about a billion-dollar only over the past two years. The partnership, McTernan added, only helps the food delivery company if it drives millions of subscribers to the platform.

Amazon had over 200 million subscribers on “Prime” at the end of 2021. The news comes at a time when Just Eat Takeaway.com NV is looking to sell Grubhub on immense pressure from investors.