Uber-Drizly Acquisition Shows How Competition Benefits Consumers

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Posted by Tom Hebert on Wednesday, February 3rd, 2021, 5:30 PM PERMALINK

Uber has announced that it is acquiring alcohol-delivery service Drizly in a $1.1 billion deal, a massive win for free enterprise and proof that the consumer-focused competitive process continues to deliver for the American people. 

Drizly is an online delivery service that allows consumers to order a variety of alcoholic beverages from local liquor stores and have them delivered directly to their location, typically within 30-60 minutes. Drizly is available in over 1,400 American cities. 

The COVID-19 pandemic has demonstrated the value of technology companies that allow Americans to buy products and have them delivered in a timely fashion. With government-mandated lockdowns forcing the entire country into self-isolation, online delivery services have been a lifeline for Americans that need groceries, prescriptions, or other household essentials delivered safely to their door. 

Drizly has experienced 300 percent growth in the last year alone, and has consistently expanded since its founding in 2012. Drizly is a prime example of a startup that has achieved success through innovation and responding to consumer demand. 

Uber’s acquisition of Drizly is a win for both companies. Drizly’s incorporation into the UberEats app will expand the services that Uber offers and give the company access to a new, diverse customer base. As for Drizly, the company has achieved the ultimate mark of success for any startup – acquisition by a larger firm. 

Consumers are the biggest winners from Uber-Drizly acquisition. Consumers will have easier access to Drizly’s service through the UberEats app. As Uber accelerates Drizly’s expansion into new markets, consumers who didn’t have access to Drizly before the acquisition will be able to use the service. 

This is a classic example of the importance of mergers and acquisitions to a free market economy. Mergers occur when two companies consolidate into one entity. Acquisitions generally occur when a larger company takes ownership of a smaller company. Mergers and acquisitions both benefit consumers by streamlining market efficiency, lowering prices, and both improving and expanding access to goods and services. 

Mergers and acquisitions are a massive driver of American innovation and entrepreneurship. In 2019, half of American startups said that their most realistic long-term goal is to be acquired by a larger firm. Without the potential for acquisition, entrepreneurs would have a lot less incentive to incur the substantial risk that comes with starting a new company. 

Ultimately, the Uber-Drizly acquisition is a model of the competitive process at work, and consumers all across the country will benefit from this deal. 

Photo Credit: Yaletown BIA

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