The Prime members of Amazon.com, Inc. AMZN in Manhattan and Dallas have reason to rejoice as the online retail giant has launched free one-hour restaurant delivery to its members in the two cities. The service is now available in 10 cities in the U.S.
The expansion of Amazon's one-hour delivery service could weigh on food delivery service providers such as GrubHub Inc GRUB, which fell as much as 5.6 percent on Tuesday.
In Manhattan, Amazon joined hands with more than 350 local restaurants including popular ones such as Blue Ribbon Fried Chicken, Le Pain Quotidien, and Sarabeth's Tribeca.
"Once an order is placed, Amazon delivery partners deliver the food in 1 hour or less," Amazon said in a statement.
Customers can place orders through Amazon's Prime Now express delivery service, which is exclusive to members of Amazon Prime, which costs $99 a year. They don't have to pay menu markups.
"Amazon Prime members across Manhattan have already experienced the convenience of ultra-fast delivery through Prime Now," said Gus Lopez, general manager, Amazon Restaurants. "And now, we are making it even better by adding free delivery from hundreds of local restaurants."
Meanwhile, Prime members in Dallas can get free delivery from local restaurants, including Blue Goose Cantina, Deep Sushi, Ellen's Southern Kitchen, and Fireside Pies.
The announcement from Amazon comes as Wal-Mart Stores, Inc. WMT is testing unlimited two-day shipping to compete with Amazon. But, experts have opined that Amazon offers more incentives for $99, including streaming videos.
In addition, reports indicate that Amazon plans to launch private label food and additional household items over the next few weeks.
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