Amazon Will Cover That Grubhub Delivery Fee For You

Another form of delivery convenience joins the Amazon roster.

Amazon, the company that has dutifully trained most of us to think of consumer goods as things we can get delivered to us right this very minute, has sunk its teeth into another wing of the delivery convenience realm: Grubhub. The result? Amazon Prime subscribers now have access to a free year of Grubhub+, meaning they won't have to pay delivery fees for 12 months.

Grubhub's parent company, Just Eat Takeaway, announced a commercial agreement with Amazon that affords Amazon a small stake in Grubhub. According to a press release from Just Eat Takeaway, that stake is a little over 2% (but could rise to 13%, according to Bloomberg).

"The agreement is expected to expand membership to Grubhub+, while having a neutral impact on Grubhub's 2022 earnings and cash flow, and be earnings and cash flow accretive for Grubhub from 2023 onwards," says the release.

In the same statement, Adam Dewitt, CEO of Grubhub, lauded the deal.

"I am incredibly excited to announce this collaboration with Amazon that will help Grubhub continue to deliver on our long-standing mission to connect more diners with local restaurants," he said. "Amazon has redefined convenience with Prime and we're confident this offering will expose many new diners to the value of Grubhub+ while driving more business to our restaurant partners and drivers."

Amazon certainly has redefined convenience for the average consumer. But is that necessarily sustainable?

What is Grubhub+?

Grubhub+, which was introduced in 2020, offers unlimited free delivery for any orders over $12. A Grubhub+ membership typically costs around $10 per month—meaning it pays for itself after about 3-5 deliveries—but Amazon Prime subscribers will now have access to the service for free for a year. Other "perks" are as you might expect, including the ability to earn rewards and access to a donation-matching program in which you donate the change by rounding up your order and Grubhub matches that donation.

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How do you sign up for Grubhub+?

Amazon Prime subscribers can redeem their one free year of Grubhub+ by accessing their subscription through Amazon's website, but there are a few hoops to jump through in order to get it.

I was able to sign up by clicking into my "Prime Membership" tab from the "Accounts and Lists" dropdown on the upper right corner of the website. From there, a bunch of offers came up, one of which was the Grubhub one.

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According to the FAQs on the Amazon signup page, existing Grubhub+ members are also eligible for the free year of membership through Amazon Prime, "with the exception of Grubhub Campus, Corporate, and certain existing partnership members." Those who already have a Grubhub+ membership should still go to their Amazon Prime benefits and follow the prompts to redeem the free year from there.

Watch out for auto-renewal: The page where you activate the membership through Amazon does note that you'll be charged $9.99 per month after a year. If you don't want that, make an alert in your calendar for this time next year so you can cancel your free membership in time and not get charged.

It's also worth noting that you can't currently activate the promotion though Grubhub directly; you have to do it through Amazon. I originally went to Grubhub's website and clicked through to the Grubhub+ section. Clicking "Try for free" brought me to a screen where I was in fact signing up for a 30-day trial and would be charged $9.99 per month after the trial period ended. And as of this writing, the option to sign up appears limited to desktop, too; it isn't appearing in my Amazon iPhone app, though that might change.

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Why does Amazon want to partner with Grubhub?

Amazon has already been serving us food in just about every other way, via its Aplenty house brand, Amazon Go Grocery, and full-on acquisition of Whole Foods—so restaurant delivery seems like the natural next step for the mega-monopoly. In fact, it's a previous step; the now shuttered Amazon Restaurants was a short-lived delivery service that teamed up with restaurants directly in major cities to coordinate delivery orders. Notably, these transactions did not include a third-party contractor. But it might just make more sense for Amazon (which already has a similar partnership with Deliveroo overseas) to partner with Grubhub, a service that already has the existing infrastructure and crucial name recognition among customers (despite recent struggles to keep up with competitors DoorDash and Uber Eats).

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Will the rush of new Grubhub+ members experience the absolute disaster of Grubhub's most recent big, flashy free food promo? Amazon is a behemoth of a company, a perk of which is that it's accustomed to handling logistics on a mass scale. So hopefully the customers, delivery workers, and restaurants all benefit from the arrangement rather than feeling the squeeze.

 

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