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Amazon (AMZN) Restaurant Delivery Service Now in Austin

Amazon.com Inc. 's AMZN Prime membership is getting bigger and better in the U.S. as the one-hour restaurant delivery service recently reached Austin.

Earlier this month, the food delivery service, launched in September in Seattle, was expanded to Baltimore.

Amazon's Restaurant Delivery Service in Austin

The service allows Amazon Prime members to view the menu and order food from the listed restaurants through the Prime Now app. The listed local outlets are Boteco ATX, Chi'Lantro, Clay Pit, Michi Ramen, Moonshine Patio Bar & Grill, Southside Flying Pizza, Sugar Mama's Bakeshop, Terry Black's Barbecue and The Backspace, to name a few. An order-tracking facility has also been added to the app.

As of now, the restaurant delivery service is available in 15 Austin zip codes. Prime members can download the app or visit amazon.com/primenow to check if their area qualifies for the service. Customers will be able to see the names of the restaurants on the home page if their area is covered under the delivery service. More restaurants will be added to the service soon.

Competitors

A lot of companies are trying to alter the face of the food delivery service in the same way that tech start-ups like Uber changed the taxi industry. In addition to GrubHub and Postmates, the online retail giant faces competition from Sprig, Munchery and Spoonrocket.

Companies like GrubHub and Postmates allow consumers to order meals through smartphone apps from a range of restaurants and have it delivered to their homes.

All these companies are going after the 365,000 autonomous U.S. food joints, which garner about $70 billion through takeouts each year, per GrubHub's latest annual report.

Amazon Prime Now

In Dec 2014, Amazon rolled out the one-hour delivery service in a small area in Manhattan. Amazon Prime Now delivers household items, alcoholic beverages and now restaurant food in certain regions of the U.S. Prime Now members can browse and purchase items through a dedicated app and avail two-hour delivery for free or pay $7.99 for the one-hour service.

Going Forward

The food delivery business has razor-thin profit margins and complicated logistics. However, considering Amazon's own fleet of delivery trucks and vast experience in logistics and distribution, we believe it is well-equipped to compete with other mobile food delivery players, like GrubHub and Eat24.

Amazon currently has a Zacks Rank #2 (Buy). Other stocks in the same space that investors may consider are Stamps.com Inc. STMP , Autobytel Inc. ABTL and Mercadolibre, Inc. MELI . All these stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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