Amazon in talks to buy Uber Eats India, plans to add food delivery to Prime

The India business of American e-commerce major Amazon is learnt to be in talks on a possible buyout of the local unit of Uber Eats, the food order and delivery platform hosted by the San Francisco-based travel aggregator. 

The talks for a buyout are in initial stages and a possible strategic alliance could also be explored, sources in the know said. 

Uber declined to comment on the subject.

According to sources, Amazon India is interested in entering the food delivery business so that it can add it to the list of services it provides, especially through its Prime membership plan. The company believes that food delivery can bring back customers to the Prime app more often than shopping for fashion, electronics or grocery is able to. 

To a detailed questionnaire, Amazon India said it had no comments to offer.

The company’s Prime membership plan has notched up more than 10 million users, according to market reports. Adding a food delivery vertical to Prime will help add daily users to the app and increase the number of transactions.

“People order almost daily from a Zomato or a Swiggy. These apps enjoy immense client stickability. Amazon believes this could be a great add-on to its membership plan,” said a source close to the company.

Sources said Uber Eats might look at a valuation of $300 million.

Earlier, Swiggy had held discussions with Uber Eats for a possible acquisition, but they had failed to strike a deal over valuation and some other issues, according to reports.

Uber Eats has faced significant competition from rivals such as Swiggy and Zomato in the country. Swiggy, which has entered the grocery delivery space, wants to make it big in that category. Zomato, on the other hand, is banking on its membership programme Zomato Gold for the next level of growth. 

While last year Swiggy delivered close to 800,000 orders a day, Zomato was a little behind at 650,000, industry estimates suggest. Uber Eats managed between 150,000 and 200,000 orders per day. While Uber Eats has gained some traction in big cities, it has not been able to take on Swiggy and Zomato, which together have over 150,000 restaurants and 200,000 delivery partners on its platforms.

Incidentally, Amazon had to recently shut down Amazon Restaurants delivery service in the US, according to reports. Last December, it had stopped the food delivery service in the UK. However, earlier this year it led a $575-million funding round in Deliveroo, a London-based food-delivery start-up. The company plans to look for an option in India and Uber Eats might be the one they zero in on.