Amazon, the Seattle-based e-commerce giant, continued its expansion into restaurant delivery Thursday with the debut of its service in Chicago. It's the sixth city in which Amazon has launched restaurant delivery since this past fall.
Customers of Amazon's subscription program, Prime Now, can access food delivery from a number of local restaurants in Chicago, spread across 18 zip codes. When users who live in a delivery area open the Prime Now mobile application, they will see options to review the menu of a restaurant, place an order, and track the status of their delivery. Once an order is placed, Amazon promises that drivers will pick up and deliver the food within an hour or less.
Amazon Prime costs $99 per year and includes free two-day shipping on more than 20 million items on Amazon’s marketplace, same-day delivery on some items, and access to streamed songs, movies, and TV shows. Thirty-eight percent of American households now use Amazon Prime, according to recent estimates.
For Amazon, adding restaurant delivery to its Prime service is yet another incentive for consumers to buy into the company's lucrative subscription program. Because customers have already uploaded their shipping, billing, and credit card information, there’s not much extra effort required to start using Amazon's delivery service.
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Restaurant delivery has proven to be a hot business prospect in Silicon Valley. Postmates, Caviar, and Doordash each offer mobile apps that let customers place orders with restaurants. These services then pick up and deliver the orders to customers. GrubHub and Seamless (grub) also allow users to order from restaurants but don't handle delivery. And on-demand transportation giant Uber is rapidly expanding its meal-delivery service, UberEats. This week Uber announced that the food delivery app will expand from lunch delivery to all-day service in 10 cities in the U.S.
GrubHub's shares fell 4% in trading Wednesday to $19.42 per share, amid investor concern around competing with services such as UberEats.