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Deliveroo offers free delivery to Amazon Prime members

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Deliveroo bikes in Dubai - AP
Deliveroo bikes in Dubai - AP

Amazon has waded into the takeaway apps war by giving members of its Prime subscription service free delivery through Deliveroo.

Prime users will receive access to the takeaway app’s Deliveroo Plus scheme, which grants subscribers free delivery on orders over £25, in the UK and Ireland.

It is the first tie-up between the two companies since Amazon paid $575m (£415m) for a 16pc stake in Deliveroo last year.

The deal provoked an investigation by competition regulators, who ultimately approved it after determining it would not limit competition and that Deliveroo faced financial difficulties without the investment.

Amazon and Deliveroo declined to reveal the commercial details of the deal or say if the online retail giant is paying for the benefit.

Deliveroo charges customers a monthly fee of £3.49 for Plus, with customers paying a higher fee if they want free delivery on orders over £10.

Deliveroo was the UK’s biggest float for a decade when it listed at a £7.6bn valuation in March, but endured a disastrous market debut. Shares fell by a quarter on their first day, although they have recovered ground since then.

Amazon sold a substantial stake in Deliveroo in the float, but remains the company’s biggest shareholder with an 11.9pc stake now worth about £720m.

However, the Prime tie-up is the company’s first commercial involvement in the delivery app. Deliveroo said bringing more people into its subscription offering would increase loyalty.

It has outlined the Plus programme as a way to encourage customers to order from the app more frequently, a crucial step if the company is to turn a profit.

It is believed to take inspiration from Amazon’s Prime scheme, which encourages shoppers to spend more at the site and has helped it become the world's dominant online retailer.

Carlo Mocci, Deliveroo’s chief business officer, said: “Amazon is one of the most customer-focused and innovative companies in the world and we are excited to launch this offer for Prime members.”

Amazon launched its own UK food delivery service in 2016 but closed it last year after failing to gain traction in a crowded market against Deliveroo and Uber Eats.