Uber is shutting down Drizly, the alcohol delivery app it purchased three years ago for $1.1 billion.

The standalone online alcohol marketplace, which was poised to integrate with with Uber's food delivery service Uber Eats, will cease operating in March 2024, Uber said Tuesday in a statement. The shutdown will allow Uber to focus on providing a one-stop experience to its customers, a representative told CBS MoneyWatch. 

"After three years of Drizly operating independently within the Uber family, we've decided to close the business and focus on our core Uber Eats strategy of helping consumers get almost anything — from food to groceries to alcohol — all on a single app," Uber senior vice president of delivery Pierre-Dimitri Gore-Coty said in a statement sent to CBS MoneyWatch. 

At the time Uber bought Drizly, pandemic-related lockdowns had sparked a surge in mobile orders as consumers sought to avoid public places by having food and alcohol delivered to their homes. At the height of the pandemic, major meal delivery services grew 162 percent compared to the previous year, according to Bloomberg Second Measure. 

But as the pandemic has eased, consumers are cutting back on delivery services, with use of those apps growing 8% last December compared to the year prior, the data shows. 

The decision to shut down Drizly also follows scrutiny of its security measures, with the Federal Trade Commission ordering new data controls and for the company to destroy personal customer data it didn't require following a 2020 hack that impacted 2.5 million customers.

Because mobile apps can make money by selling their users' data, collecting less data could translate to lower profits, although it's unclear whether Drizly sells its users' data. Its privacy statement notes that it shares customer data with a number of other businesses, including advertising and research firms.

Drizly did not immediately respond to CBS MoneyWatch's request for comment. 

In:
• Federal Trade Commission
• Food & Drink
• Uber

Elizabeth Napolitano is a freelance reporter at CBS MoneyWatch, where she covers business and technology news. She also writes for CoinDesk. Before joining CBS, she interned at NBC News' BizTech Unit and worked on The Associated Press' web scraping team.