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Amazon launches restaurant delivery in Manhattan with more than 350 eateries

Free delivery, but the fee for restaurants to participate is steep.

an amazon prime now delivery person hands a bag to a customer Amazon
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Manhattan's restaurant delivery market just got a lot more crowded.

Amazon announced today that it is partnering with more than 350 New York City eateries on meal delivery, in a move that will pit it against a host of incumbents and delivery startups, as well.

The list of restaurants participating with Amazon at launch include well-known local names like Blue Ribbon Fried Chicken, Le Pain Quotidien and Sarabeth's Tribeca.

Amazon is also adding restaurant delivery in Dallas, Texas, which means that the service is now available in 10 cities in the U.S. Customers place orders through Amazon's Prime Now express delivery service, which is only available to members of Amazon Prime, and costs $99 a year or $10.99 a month.

Amazon will not charge any delivery fees or service fees on these orders, and restaurants won't be permitted to mark meal prices up, either. Amazon had previously said its no-fee structure was temporary, but the company now says it is permanent.

Several of Amazon's competitors — like GrubHub's Seamless, delivery startup Postmates and Square-owned Caviar — either charge extra fees on orders, or allow participating restaurants to do so.

The benefit for customers comes with a big consequence for participating restaurants, however. Amazon is reportedly charging restaurants 27.5 percent of each order, which is as much as double what some competitors charge. That's a steep price for the potential volume Amazon can drive.

An Amazon spokesman declined to comment on Amazon's reported cut of sales, but said that the service allows restaurants to add new customers and "takes the burden of delivery off a restaurant's back."

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