Uber shutting down popular billion-dollar service

Of the many innovations and strokes of genius that came out of the past decade, ride sharing — and the many subsequent conveniences that followed — is certainly one of the most transformational. 

Not too long ago, city dwellers looking to get anywhere from the airport to uptown had to hope they’d be able to grab an empty cab. For the suburban population, calling a car service was an option, but that required planning and took any spontaneity out of a trip.  

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Enter Uber  (UBER) – Get Free Report, formerly known as Ubercab. The ride-sharing app, which went on to disrupt much of the taxi industry, was born out of necessity when its founders kept struggling to find a reasonably priced car service in several cities. 

Uber’s story follows a typical path. A company finds an untapped corner of a market with a lot of pent-up demand and delivers the solution seamlessly to that user base. 

And there was demand — so much so that the company went public in 2019 at a valuation of about $75 billion. 

But a year later, the pandemic hit and everybody stopped traveling. Uber had to pivot, so it began to pour resources into its burgeoning new concept UberEats, plus it acquired competitor Postmates in the same year. 

The food-delivery service connected folks sheltering at home with local restaurants that were slowly starting to come online again. And suddenly Uber had a robust, multipronged business that could shield it from singular market downturns. 

And where there is demand for food, there is usually demand for alcohol. So one year later, Uber acquired alcohol delivery service Drizly for $1.1 billion. 

Uber shuts down beloved service

Drizly was different from Uber’s other services. Rather than hiring out contract drivers, as Uber and UberEats do, it worked directly with local liquor stores and their employees to fulfill orders. Drizly was simply the middleman taking orders from thirsty customers. 

The Uber app logo is displayed on a mobile phone screen with Drizly website background. in Krakow, Poland, on Feb. 5, 2021. (Photo illustration by Beata Zawrzel/NurPhoto via Getty Images)

NurPhoto/Getty Images

On Monday, Uber said it would shut down Drizly to focus on more central aspects to the business, namely food. 

“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,” Pierre-Dimitri Gore-Coty, Uber’s senior vice president for delivery, 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.”

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In 2020 (a year before Uber’s acquisition), Drizly revealed it had a cybersecurity flaw which made the information of about 2.5 million customers vulnerable. 

The Federal Trade Commission found that Drizly had been aware of the flaw at least two years prior but had not taken the necessary steps to patch the issue. It’s not clear if this debacle played into Uber’s ultimate decision to part ways. 

Uber still delivers alcohol on its UberEats app, as long as customers verify they’re of legal drinking age.

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