Amazon has quietly shut down U.K. restaurant delivery, emailing customers that the service would end after just two years.
Why would Amazon do this? While some look at this development as the beginning of the end of a big shakeout or portends some third-party slowdown. It’s probably not. First, as other third-party delivery providers have shown, this industry is a lot of work for penny profits and requires massive scale and major marketing to be profitable at all. Amazon seems to show no fear when it comes to growing into other industries, but delivery just doesn’t play to the company strengths of logistics and infrastructure. While it has a huge number of drivers on the roads, they can hardly keep up with the package delivery. And other U.K. firms and entrants like DoorDash and Uber Eats; there is an incredible amount of competitive pressure that makes the difficult task of third-party delivery even harder.
The Evening Standard pointed to Deliveroo as a major competitor to Amazon. https://www.standard.co.uk/business/business-news/amazon-takeaways-axed-after-two-years-following-fierce-competition-from-deliveroo-a3996896.html
This move may herald the exit of Amazon from third-party delivery globally, but it may also show that the megalithic companies aren’t going to take over without a fight.