Uber to Discontinue Drizly, Its Alcohol Delivery Subsidiary
Uber has made the strategic decision to discontinue its alcohol delivery division, Drizly, a subsidiary it acquired three years ago for a staggering $1.1 billion. This development emerges from an in-depth analysis.
Originally acquired to expand its delivery services, Drizly’s operational model was a departure for Uber. Rather than employing its own delivery personnel, Drizly functioned by equipping local liquor stores with the necessary technology to execute their own deliveries.
One of the critical challenges that may have influenced Uber’s decision involves cybersecurity concerns. A significant data breach in 2020 at Drizly compromised the personal information of approximately 2.5 million customers. More concerning was the revelation that Drizly had been aware of the vulnerability for two years prior to the breach, a fact uncovered by the Federal Trade Commission (FTC) following Uber’s acquisition. This led to an FTC directive limiting Drizly’s ability to collect and store customer data.
Pierre-Dimitri Gore-Coty, Uber’s Senior Vice President of Delivery, commented on the closure: “After a three-year period of independent operation within Uber, we have chosen to shut down Drizly and concentrate on our primary mission with Uber Eats, which is to offer a wide range of products including food, groceries, and alcohol through one consolidated application.”
He further expressed gratitude towards the Drizly team, acknowledging their role in pioneering the beverage alcohol delivery sector and contributing significantly to its growth.