July 6 (UPI) -- Amazon is launching a partnership with Grubhub that will offer its Prime members a free one-year subscription to the online and mobile prepared food ordering and delivery platform, the company said Wednesday.
The agreement gives Amazon the right to buy a 2% equity stake in Grubhub, with a chance to increase that stake to a total of 15% depending on certain performance factors like number of customers added.
Founded in Chicago in 2004, Grubhub is a subsidiary of Dutch multinational online food ordering and delivery company Just Eat Takeaway.com.
In April, news broke that the parent company was exploring a sale of its Grubhub subsidiary only a year after buying it.
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The company's stock was up 15.46% on the news Wednesday, ending the trading day at 15.86 euros.
The partnership between the two companies renews automatically each year unless either one decides to terminate it.
The one-year free Grubhub membership is only available to Amazon Prime members in the United States.
"I am incredibly excited to announce this collaboration with Amazon that will help Grubhub continue to deliver on our long-standing mission to connect more diners with local restaurants. Amazon has redefined convenience with Prime and we're confident this offering will expose many new diners to the value of Grubhub+ while driving more business to our restaurant partners and drivers," Grubhub CEO Adam DeWitt said in a statement.
Amazon hopes to entice new members to its online streaming platform with the free food delivery membership. The news comes a week ahead of the company's Amazon Prime Day promotion, July 12-13.
"Being able to give Prime members one year of Grubhub+ and no delivery fees from restaurants is our way of saying 'thank you,'" Amazon vice president Jamil Ghani said in a statement.
"Prime already delivers great value for members. These new exclusive offers and experiences show how a single Prime membership unlocks a whole world of potential."
