Amazon Prime, $AMZN, now comes with free Grubhub food delivery

The e-commerce giant previously offered Prime members a yearlong subscription to Grubhub, which includes free delivery on orders over $12. The deal announced Thursday makes the food-delivery service a permanent feature of Amazon’s membership program. As part of this change, people without Prime can also place Grubhub orders directly through Amazon’s website and mobile app.

In recent years, Amazon has consistently added benefits to its Prime membership to attract and retain members, while facing increasing competition from Walmart and Target’s loyalty programs. The company has added discounted One Medical memberships to the program, in addition to existing perks like fast shipping and video streaming.

In July 2022, Amazon secured the rights to acquire a 2% stake in Grubhub, the U.S. subsidiary of Just Eat Takeaway.com, with the option to increase its stake to 15% based on certain performance factors, such as the number of new customers added.

Just Eat announced in a separate release on Thursday that Amazon has received warrants representing a 4% stake in Grubhub. As part of a new five-year agreement, Amazon will receive options for another 4% stake in Grubhub and may also receive warrants for up to 10% of Grubhub’s equity depending on performance conditions.

Amazon once operated a food-delivery service that competed with companies like Grubhub, Uber Eats, and DoorDash. It launched Amazon Restaurants in 2015, allowing Prime members to order meals from local restaurants, which were then delivered by its fleet of drivers.

The company shut down Amazon Restaurants four years later to focus on grocery delivery. It has since expanded its selection of nonperishable items and pantry staples available on its site. Additionally, Amazon offers online ordering from its Whole Foods and Fresh supermarkets.