Booze Delivery Apps Drawing Attention of Regulators

In a world where it seems every other startup wants to be known as the “Uber for _______,” call these companies the “Ubers for booze.”  Tap an app on your phone, and have beer, wine or liquor delivered to your door by the likes of Ultra, Klink, and new entrant BrewDrop, which just launched in Austin.

And just as Uber drew government scrutiny as it moved from startup to industry upstart, it should not be surprising that some of these companies now being targeted by alcohol regulators. The first casualty is Ultra, whose operations have been shut down in Washington, DC, by the city’s Alcoholic Beverage Regulation Administration [ABRA].

The crux of the DC regulator’s argument against Ultra is that, while the booze orders are actually fulfilled by Ultra’s partners, which are licensed to sell liquor in DC, Ultra itself is also required to have a license because it is the one that processes and accepts the payments. ABRA set forth this position in an advisory opinion handed down in March in reference to another would-be competitor, BeerRightNow.com. Klink, for its part, notes that it does not actually involve itself in the transaction and remains in operation in Washington, DC.

So, for now, Ultra’s deliveries are grounded in DC, but remain ongoing in at least one DC suburb as well as several other cities including Chicago and New York. The company’s website indicates it also intends to expand soon to Boston and Los Angeles.  Expect regulators to pay attention when they do.

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