February 23, 2024

Back in 2021, Uber purchased Drizly for $1.1 billion shortly after it reported that its food delivery segment kept its losses manageable during the pandemic. Three years later, the company is shutting down the US-based alcohol delivery service, Axios has reported. Pierre-Dimitri Gore-Coty, Uber’s SVP of delivery, told the publication that the company has decided to close the business and to focus on its “core Uber Eats strategy.”

In SEC’s announcement of the acquisition, Drizly was described as a service that “works with thousands of local merchants to provide consumers with an incredible selection of beer, wine, and spirits with competitive, transparent pricing.” Uber integrated Drizly’s offerings into its Eats app, but the alcohol delivery service maintained a separate application of its own.

“After three years of Drizly operating independently within the Uber family, we’ve decided to close the business and focus on our core Uber Eats strategy of helping consumers get almost anything — from food to groceries to alcohol — all on a single app,” Gore-Coty said in a statement. “We’re grateful to the Drizly team for their many contributions to the growth of the BevAlc delivery category as the original industry pioneer.”

It’s unclear if Drizly’s cybersecurity issues played a role in Uber’s decision. Drizly previously confirmed a data breach in 2020 that exposed the information of 2.5 million customers. After Uber’s acquisition, the Federal Trade Commission found that Drizly CEO James Cory Rellas was alerted about the company’s security issues way back in 2018. The agency determined that the delivery service failed to implement the proper safeguards to protect its users despite claiming it had done so and that its poor security practices made the data breach possible. It ordered Drizly to destroy any personal data it collected that had nothing to do with its services and to refrain from collecting them in the future. The FTC also required Rellas to implement information security programs at any company he joins or forms where he takes on the role as CEO. Either way, Drizly is gone, but Uber seems to intend to continue delivering alcohol to its customers.