Food Delivery
Amazon Restaurants
Amazon Restaurants was Amazon's four-year attempt to win food delivery. Launched in Seattle in 2015 through Prime Now, it offered free delivery for Prime members and no menu markups, and it still could not gain a foothold against Grubhub, Uber Eats, DoorDash, and Deliveroo. Amazon closed the UK service in 2018 and shut the US business in June 2019, then did the telling thing. Instead of competing, it put $575 million into its rival Deliveroo.
- Company
- Amazon
- Started
- 2015
- Ended
- 2019
- Amazon's stake in rival Deliveroo, weeks before quitting delivery itself
- $575M
- Collapse speed
- Gradual
- Preventability
- Medium
- Lesson transfer
- Industry-wide
- Last reviewed
- 2026-07-24
Narrative
The story
The ambition
If any company could muscle into food delivery, it should have been Amazon. It had Prime, a vast logistics network, and a habit of entering new markets and winning. In the fall of 2015 it launched Amazon Restaurants in Seattle as part of Prime Now, its two-hour delivery service, and expanded to other US cities and, in September 2016, to London. The offer was aggressive: no markups on menu prices and free delivery for Prime members on qualifying orders.
The rise
On paper the pieces fit. Amazon already ran fast local delivery through Prime Now, already had tens of millions of Prime members in its target cities, and could subsidize the service from a company that rarely worried about short-term profit. Food delivery was booming, and Amazon moved into it with the resources most startups could only dream of.
The cracks
It did not work. The market was already crowded with focused, well-funded rivals: Grubhub, Uber Eats, DoorDash, and, in London, Deliveroo and Just Eat, all of them willing to discount heavily to win share. Against them, Amazon largely failed to establish itself in either market share or, just as important, consumer mindshare. When people thought about ordering dinner, Amazon simply was not the name that came to mind, and its scale advantages in warehousing and parcels did not translate into an edge in getting hot food from a restaurant to a door.
The collapse
Amazon retreated in stages. In December 2018 it closed Amazon Restaurants in London, unable to overcome Deliveroo and Uber Eats there. Then, on June 24, 2019, it shut the US service too, along with its Daily Dish workplace-lunch delivery. The most revealing move came just weeks before the US shutdown: rather than keep fighting, Amazon led a $575 million investment in Deliveroo, choosing to back a competitor rather than beat one. Food delivery was one of the rare markets Amazon entered and simply left.
The aftermath
The shutdown was folded into a broader Amazon housecleaning that also closed its Spark social-shopping feed and reorganized parts of its games unit, framed internally as pruning experiments to focus on core money-makers like AWS, retail, and advertising. Amazon kept pushing into food through groceries (Whole Foods, Amazon Fresh) rather than restaurant delivery, and its stake in Deliveroo became its exposure to the category it could not win directly.
The lessons
Scale is not a master key. Amazon's logistics genius is built for predictable, warehoused goods moving through its own network, and almost none of that transfers to the messy, real-time problem of hot food from thousands of independent restaurants, where the winners had spent years building dense driver networks and restaurant relationships in each city. The deeper miss was mindshare: in a market with entrenched habit-forming rivals, being late and undifferentiated means customers never think of you, and no amount of Prime subsidy buys the reflex of opening a particular app when you are hungry. Amazon's willingness to quit is the instructive part. Recognizing that a market's incumbents had an advantage it could not cheaply overcome, and buying a stake in one rather than burning money to lose slowly, is the discipline that most companies, and most founders, lack.
Causal timeline
Failure Anatomy
- 2015
- 2017
- 2018-12
London closes
In December 2018 Amazon shut its London restaurant-delivery service, unable to overcome Deliveroo, Uber Eats, and Just Eat. [5]
Stronger competitor - 2019-05
Backing the rival
Weeks before the US shutdown, Amazon led a $575 million investment in Deliveroo, choosing to back a competitor rather than keep fighting. [6]
Strategic drift - 2019-06-24
US shutdown
On June 24, 2019 Amazon shut Amazon Restaurants in the US (and its Daily Dish lunch service), exiting restaurant delivery. [7]
Structured analysis
What Went Wrong
Root causes
Entrenched, focused rivals. Grubhub, Uber Eats, DoorDash, and Deliveroo were established, well-funded, and willing to discount to hold share, leaving little room for a late entrant. [3]
Scale that did not transfer. Amazon's advantages in warehousing and parcel logistics did not translate into an edge in real-time restaurant delivery, and it never gained meaningful market or mindshare. [4]
Contributing factors
No reason to switch. With no differentiation customers cared about, Amazon was not the name that came to mind for ordering food, despite free Prime delivery and no menu markups. [2] [4]
Immediate trigger
Exit and invest in a rival. Weeks before shutting the US service in June 2019, Amazon led a $575 million investment in Deliveroo, choosing to back a competitor rather than keep competing. [6] [7]
Visible symptoms
No market share. Amazon largely failed to establish itself as a significant player in restaurant delivery in either market share or consumer mindshare. [4]
Warning signs
The London retreat. Amazon closed its London restaurant-delivery service in December 2018, an early sign it could not win against local incumbents. [5]
Affected groups
Evidence
Claims & sources
Every numbered marker in the analysis links to the claim it rests on, and each claim to its sources.
- [1]
Amazon Restaurants launched in Seattle in fall 2015 as part of Prime Now and expanded to other US cities and to London in September 2016.
- [2]
Amazon Restaurants offered no markups on menu prices and free delivery for Prime members on qualifying orders.
- [3]
Amazon Restaurants faced intense competition from Grubhub, Uber Eats, DoorDash, and Deliveroo, which discounted to win market share.
- [5]
Amazon closed its London restaurant-delivery service (effective December 3, 2018) after failing to overcome Deliveroo, Uber Eats, and Just Eat.
- [6]
Weeks before shutting the US service, Amazon led a $575 million investment in the rival Deliveroo, choosing to back a competitor rather than keep competing.
- [7]
On June 24, 2019, Amazon shut Amazon Restaurants in the US, along with its Daily Dish lunch-delivery service, exiting restaurant delivery.
Sources
Amazon Restaurants in US is shutting down
TechCrunch · 2019-06-11
Amazon shuts down its restaurant delivery business in the US
Engadget · 2019-06-11
Amazon closes its restaurant delivery service in London
TechCrunch · 2018-11-26
Amazon Primed: Spark Closure, Amazon Restaurants Closure, Amazon Games Woes
Forbes · 2019-06-16