Uber shuts down Drizly, America’s pandemic alcohol delivery hero

Uber stock was up slightly Tuesday after news of Drizly’s closure started to make its way around the internet.

The decision to shutter Drizly is apparently based on business redundancies and convenience. Consumers, an Uber spokeswoman noted, prefer to use a single app when ordering deliveries, and the alcohol category on Uber Eats had already doubled globally in the last year. The Uber Eats app has the ability to deliver alcohol to 35 states and more than 25 countries around the world, she said.

The switch-over will apparently not cause Drizly consumers much grief. The majority of Drizly users, a spokeswoman said, also have Uber accounts. As of the third quarter of 2023, Uber had 142 million active monthly users.

Founded in 2012 by Cory Rellas, Justin Robinson, Nicholas Rellas and Spencer Frazier, Drizly partners with retail to deliver alcohol directly to consumers. The Boston-based company’s sales skyrocketed during the early days and months of the pandemic, when Americans increased their drinking habits while stuck at home. In 2020, Drizly reported that its sales increased 350 percent over the previous year. Sales peaked in April 17, 2020, with a reported 1,000 percent increase compared to sales a year earlier.

Uber acquired Drizly in 2021 as part of the San Francisco-based company’s strategy to diversify its business while demand for ride shares plummeted during the pandemic. Uber shelled out $1.1 billion in cash and stock for the acquisition.

Over the years, Drizly ran into trouble over security breaches, dating back to 2018. The Federal Trade Commission said in 2022 that Drizly and its former chief executive, Cory Rellas, “failed to put in place reasonable safeguards to secure the personal information it collected and stored.” A year ago, the agency ordered Drizly to destroy “personal data it collected that is not necessary for it to provide products or services to consumers and must refrain from collecting or storing personal information unless it is necessary for specific purposes.”

At its peak, Drizly delivered alcohol in 36 states and more than 1,500 cities, including New York, Los Angeles, Houston, Atlanta and Washington. Many jurisdictions had to change or suspend their laws to allow for alcohol delivery during the pandemic.

It’s not clear how many employees work at Drizly, but an Uber spokeswoman said there are no immediate layoffs. However, she said Uber will eliminate some Drizly jobs, as well as jobs at Uber that support Drizly, once the alcohol-delivery business ends in March. Some of those employees, she said, will be offered jobs at Uber based on company needs.