Acquisition of Drizly, which will be integrated into Uber’s Eats platform but maintain separate app, pushes share price up 6.5%.
Uber is acquiring on-demand alcohol platform Drizly for about $1.1bn as the ride-share company looks to expand delivery services that have flourished during the pandemic.
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Uber said the Drizly acquisition will allow the company to offer beer, wine and spirits in the majority of US states in addition to groceries, package and prescription delivery it recently launched in some regions.
The Covid-19 pandemic induced lockdown measures across the world dealt a blow to Uber’s ride-hailing services, pushing the company to branch out into new categories of delivery services.
Revenue from Uber’s food delivery business Eats surpassed rides revenue for the first time in the second quarter of 2020.
Uber declined to give details on what demand it projects for alcohol sales, but said Drizly had grown gross bookings profitably 300% on a yearly basis.
Uber shares were up 6.5% at $56.20 on Tuesday.
Drizly, which says it works with retail partners in more than 1,400 North American cities, will become a wholly owned subsidiary of Uber. It will be integrated into the Eats platform, while also maintaining its separate app.
Drizly in May 2020 launched Lantern, a cannabis delivery service currently operating in Boston and Detroit, its website said. Uber told Reuters that Lantern is not part of the Drizly deal.
In a Tuesday interview with CNBC, the Uber chief, Dara Khosrowshahi, said the company was currently not actively interested in cannabis delivery, but could be more open down the road.
Lantern sells marijuana products, including plants for smoking, cannabis vaping products and edibles, including chocolate and chews with cannabis, its website said.
Uber expects that more than 90% of the deal will be made through Uber stock and the balance paid in cash to Drizly stockholders.
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