Amazon and Deliveroo deepen ties with Prime food delivery bundle

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LONDON – Amazon announced Wednesday its first major tie up with U.K. food delivery firm Deliveroo since it invested in the company two years ago, offering Prime customers free delivery on takeout orders over a certain amount for a year.

Millions of Amazon Prime members in the U.K. and Ireland will get access to the lower tier of the Deliveroo Plus service, meaning they’ll be eligible for free deliveries when their orders exceed £25 ($34) in value.

The partnership comes after regulators at the Competition and Markets Authority investigated Amazon’s investment in Deliveroo to see if it presented any competition concerns.

Amazon’s investment was ultimately approved after regulators concluded the deal didn’t present any significant competition concerns and that Deliveroo would struggle to survive without the investment.

It gave the e-commerce giant a 16% stake in Deliveroo, which is led by former Morgan Stanley banker Will Shu.

Amazon has 200 million Prime subscribers worldwide and an undisclosed amount in the U.K. and Ireland.

Deliveroo declined to share whether Amazon has paid it an additional fee for the benefit of being able to offer Prime members access to the “silver” level Deliveroo Plus, which normally costs £3.49 a month.

In May 2019, Deliveroo announced it had raised a $575 million funding round led by Amazon. Just two months later, the CMA put the brakes on the deal. Then, later in the year, the CMA launched a formal probe to examine potential anti-competitive implications. 

When it began its investigation, one of the CMA’s main concerns was the potential for the deal to prevent Amazon from re-entering the online restaurant food market. Amazon had previously operated an online takeout business called Amazon Restaurants but subsequently exited the market in 2019.

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