Amazon Prime gets into food delivery, invests in Grubhub

Amazon now holds a stake in Just Eat's U.S. meal delivery business, Grubhub, officially entering the food delivery space — again.

This isn't the company's first foray into meal delivery. Amazon has tried to enter the space before but shut down Amazon Restaurants, its in-house delivery service, in 2019.

Now, the tech giant will be taking a 2 percent stake in Grubhub, with the option to increase the holding to 15 percent, Bloomberg reports. Grubhub is owned by Just Eat Takeaway, known as Europe's largest meal delivery company, which took a major hit this year — its stock fell by 67 percent, according to the news outlet. The deal is a welcome relief for the company, since shareholders reportedly demanded that it find a partner for Grubhub or sell the business entirely.

The membership agreement will be renewed each year unless either Amazon or Grubhub decide to terminate it, Just Eat told Bloomberg.

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U.S. Prime users will be offered a free one-year Grubhub+ membership (usually $9.99 per month) starting today. This means no delivery fees on orders over $12 from "hundreds of thousands of restaurants," according to the company. Launched in 2020, Grubhub+ is the platform's premium subscription service where members receive free delivery on orders and other potential benefits like discounts.

Notably, Grubhub has recently come under criticism, even legal action, for hidden fees, with the District of Columbia alleging multiple violations of D.C.'s Consumer Protection Procedures Act in March.

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SEE ALSO: The District of Columbia is suing Grubhub for hidden fees, misleading advertising, and more

Adam DeWitt, CEO of Grubhub, said in a statement that the partnership "will help Grubhub continue to deliver on our long-standing mission to connect more diners with local restaurants."

Around a year ago, Amazon offered Grubhub+ subscriptions to Amazon Prime Student members for free. This partnership is a major expansion on such initial offerings.