Three years after acquiring alcohol delivery app Drizly, Uber is shutting the platform down and moving all liquor delivery services to Uber Eats.
What's $1.1 billion? Uber announced Tuesday that it is shutting down Drizly, the app it spent that much money to acquire in 2021, and will be transitioning all its customers onto Uber Eats.
Like most delivery services, Drizly saw huge growth in the first year of the pandemic, growing about 300% in 2020/2021, prior to the acquisition. With fewer people taking cars places, Uber was focused on its food and drink delivery business as well, and after the acquisition, it integrated Drizly's marketplace into the Uber Eats app.
But, as Axios notes, shortly before the deal went through, it came to light in 2020 that Drizly had a data breach that exposed information of 2.5 million customers. And then, after the acquisition, the Federal Trade Commission learned that Drizly was aware of the security flaw that led to the hack for two years and failed to fix it.
Subsequently, the FTC restricted how much information apps like Drizly can collect on customers, and the FTC issued an order telling the company to destroy all data that it no longer needs. The order also specifically called out CEO James Cory Rellas for the company's failure to guard against cybersecurity threats.
In addition to the app and its customers, Uber also acquired Drizly's alcohol distribution network, which will now become part of Uber Eats.
The company said Tuesday that "the drink selection you know and love is available" on Uber Eats, and will continue to be after Drizly shuts down in March.
"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," says Pierre-Dimitri Gore-Coty, Uber's SVP of delivery, speaking to Axios.