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Amazon’s food delivery service arrives in San Francisco, will price match the restaurant menu or pay the difference

TechCrunch TechCrunch 26/04/2016 Sarah Perez

Amazon is ramping up the competition with other restaurant delivery services starting today by announcing that it will not mark up the menu prices of the items it offers on-demand via Prime Now Restaurant Delivery, and it will, in fact, refund customers the difference if they discover a higher price on Amazon’s service within 24 hours of placing their order. This “Price Guarantee” will roll out to all eight markets where Amazon’s restaurant delivery is available, starting with its newest city, also announced today: San Francisco.

The company has been expanding its restaurant delivery quickly, as San Francisco is the eighth market to launch since September. As with its other regions – which today includes San Diego, Chicago, Seattle, Los Angeles, Baltimore, Austin, and Portland – Amazon says that delivery is free, and there are no additional fees for using its service, beyond the cost of the annual Prime membership, of course.

Customers can place orders using the Prime Now app, then take free, 1-hour delivery from any of the featured restaurants.

Of course, without marking up the menu items it delivers, it’s not likely that Amazon’s latest on-demand service is turning a profit at this time. Instead, it’s just another perk that Amazon offers its Prime members. And it can afford to take a loss while scaling its food delivery service, which isn’t core to Amazon’s overall business. (Amazon does a rev share with its restaurant partners, and it won’t promise that it will be free from delivery fees indefinitely.)

The San Francisco  launch puts Amazon in immediate and direct competition with a number of other established firms like GrubHub, Seamless, Caviar, Postmates, UberEATS and more, in a region where the customer base tends to be more tech-savvy and willing to try new things.

And given that many of the competitors in this space do mark up menus, Amazon’s Price Guarantee is an aggressive position meant to help it establish market share as it enter this crowded space. But that price matching offer won’t last forever, it seems – Amazon’s website says the Price Guarantee is a limited-time offer that expires at the end of 2016.

In San Francisco, the company’s rollout is one of the larger to date as it’s going live in 33 zip codes across the city with more than 115 restaurants participating from day one. Some notable names includes Big Chef Tom’s Belly Burgers, DOSA, The Monk’s Kettle, Nick’s Crispy Tacos, and Pressed Juicery, for example. The full list of zip codes and restaurants is available here.

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