Amazon is giving Prime subscribers a year’s free Deliveroo Plus membership, offering free deliveries on any orders over £25.
Deliveroo and Amazon have launched their first consumer-facing initiative since Amazon made a major investment in the delivery giant in 2019.
Prime customers in the UK and Ireland will from today have access to Deliveroo Plus, offering unlimited free deliveries from all of its 50,000 restaurant and grocery partners.
According to the pair, the move is designed to attract new highly engaged digitally savvy customers to its platform, and increase retention and loyalty among its existing 3.9 million users.
The new offer will be the equivalent of a “silver tier” Deliveroo Plus membership, meaning customers no longer have to pay the £3.49 delivery fee.
According to investment giant Jefferies, the move will sooth investor fears following Deliveroo’s difficult float earlier this year.
“With a reported c10m subscribers in the UK (source: Statista; total UK households of c28m), Amazon Prime is the totem of consumer subscription services,” Jefferies said.
“Bundling Plus into Prime is an obvious and powerful path to amplifying the utility of the Deliveroo platform to those 10m UK households (vs UK MACs of only 3.9m people). Allied with ceaseless commercial momentum (noting the 24-Aug Boots partnership), & outperformance on coverage rollout, Deliveroo allays fears on both profitability (ie density of network) and growth (ie will competition act as a constraint).”
It comes after the Competition and Markets Authority (CMA) gave its final approval for Amazon to take a 16 per cent stake in Deliveroo last August.
The CMA said that following more than a year of considerations it has finally concluded that the deal would “not result in a substantial lessening of competition in either restaurant delivery or convenience grocery delivery”.
The deal has drawn criticism and controversy across the industry since Amazon led a $575 million funding round for Deliveroo back in May 2019.
However, the CMA has stipulated that any attempts by Amazon to raise its stake in Deliveroo could spark a further investigation.