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Amazon Brings Restaurant Delivery to San Diego

Feb 16, 2016

Seattle-based e-commerce giant Amazon continues to aggressively roll out its restaurant delivery service, expanding to its seventh market in six months. On Tuesday, Amazon said San Diego would be the latest city to be able to access its fledgling service, joining Chicago, Seattle, Los Angeles, Baltimore, Austin, and Portland, Ore.

Customers of Amazon’s subscription program, Prime Now, can access food delivery from a number of restaurants in San Diego, spread across 16 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 in an hour or less. Amazon said Tuesday that the average delivery time since introducing restaurant delivery on Prime Now is 39 minutes.

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For Amazon (amzn), restaurant delivery is another service to tack on to its subscription membership, Amazon Prime, which 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. 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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Despite Amazon's dominance in e-commerce, restaurant delivery is a challenging battleground because of the growing number of competitors.

Postmates, Square's Caviar, and DoorDash each offer mobile apps that let customers place orders with restaurants. These services then pick up and deliver the orders. GrubHub (grub) and Seamless 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. In January, Uber announced that the food delivery app will expand from lunch delivery to all-day service in 10 U.S. cities.

The good news for Amazon is the company is making plenty of money from its e-commerce and cloud operations, and restaurant delivery isn't necessarily core to the its business.

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