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During the Covid-19 crisis, I started hearing a lot of restaurants complaining about GrubHub because of its fees and practices.
At first, I thought these claims were a little overblown because a service can’t run without earning money in some sort of way. I figured these were restaurants that newly transitioned to take-out and weren’t quite used to having to deal with GrubHub, UberEats, ChowHound, etc.
Then I started noticing companies were only mentioning GrubHub, and I drove past a few restaurants that requested people use ChowHound or DoorDash to order from them. That’s when I started paying attention.
Here are just a few of the things I found out:
1. GrubHub adds restaurants to its platform without consent and with marked-up prices
Through its recent “non-partnered” program, GrubHub has begun adding restaurants to its platform who have decided not to partner with GrubHub. They make up for the lack of revenue directly from the restaurant by marking up the menu prices. Because the restaurants don’t know they are on GrubHub, they have to deal with confusing situations where customers aren’t happy with their delivery orders–when the restaurant itself does not offer delivery.
In some cases, they tried to sell delivery from restaurants that don’t even offer take out. (Seamless is a GrubHub product, as is AllMenus and others).
2. GrubHub replaces restaurant phone numbers online with its own
Yes, GrubHub actually goes through the web and replaces the restaurant’s direct line with their own on different platforms. While a customer thinks they are calling the restaurant directly, they are actually speaking to a GrubHub employee who in turn, calls the restaurant and charges an acquisition fee for fulfilling an order.
Since this acquisition fee is a fixed cost, restaurants sometimes lose money on orders when someone places a small item to go. So if I just wanted to grab a bubble tea from a restaurant and (unknowingly) called the GrubHub number to place the order, I could cost the restaurant $3 (in addition to the food costs) for fulfilling my order.
3. GrubHub creates dummy websites pretending to be the real restaurant’s website to trick people into ordering from them
Similar to (and as devious as) swapping out restaurants’ phone numbers, GrubHub was found to be creating shadow websites for popular restaurants, with their pages ranking higher than the real website in some cases, capturing the commission from someone trying to order through the restaurant’s website. Often, they are set up with the restaurant’s name (and a .net instead of a .com), and the restaurant’s logo.
Here’s a tweet from someone showing GrubHub’s website compared to the original website:
Ordering food online or from an AI might be “easy,” but the real costs are taken from the businesses themselves. Here’s a fake website GrubHub set up to resemble my parents’ biz in an effort to drive up commission (from 3% to ‼20%‼) https://t.co/jVetvS8SU9 pic.twitter.com/CmL05aVrF2
— Natt à¸à¸²à¸£à¸¸à¸“รังษีวงศ์ (@nattgarun) June 28, 2019
GrubHub states that creating these websites was part of the contract with the restaurant, but I still view it as very shady (and probably not something the owners would be looking out for in their contracts).
4. During the coronavirus outbreak, they have listed un-partnered restaurants as “closed” (vs. not on the platform)
It’s been difficult to find out information about different restaurants during this whole pandemic. On GrubHub, if you typed in the name of a restaurant that was no working with GrubHub, in some cases it would tell you that the restaurant was “closed” and suggested a different restaurant to go to.
I was almost tricked by this myself! I wanted sushi and it said my spot was closed and suggested another one. When I was surprised by the other sushi restaurant’s prices, I pulled up my usual spot’s website to compare. And the website said they were open during the pandemic!
From this article in Fox Business:
“Nobody from Grubhub reached out to us to see if we were open or delivering before telling the world that we were closed and pointing my potential customers to restaurants that were paying Grubhub,” Erik Riggs, the owner of Freshcraft, noted in a press release. “We are doing what we can to stay afloat and Grubhub is just feeding off people’s troubles.”
Anyway, that is what I’ve found out about GrubHub. I’m sure the other delivery services aren’t innocent either, but GrubHub really seems to be up there in terms of trying to grab an extra dollar (or eight) from businesses.
If you feel any differently or know of anything about the other delivery companies, feel free to drop by the comments section below. Stay safe!
Thanks for sharing this information. Wow, just wow! What dirty sleaze bags. All these greedy people trying to make money by coming up with creative ways to deceive the public and cheating the restaurant
WOW! That’s very shady. I hope the get sued.
If the cases cited above are true, that is deliberate and false advertising, and I also hope GrubHub get sued.
Uber is trying to buyout GrubHub
This is why Uber is firing their employees to raise more cash
I am a previous employee of Grubhub and have known how they do and now they blocked me. If I had money to get a lawyer I would sue them and have so much against them
If you have a viable (good) case, you should be able to get a lawyer on contingency (you pay them a % after you win the case).
Im a new grub hub driver and if they are making extra money on the sly, they sure arent sending to the drivers who actually have interaction with customers. Im not complaining, ive made good money in my first week, but if extra money is being made, at least pay the drivers.
Wow. GrubHub has a terrible reputation but as the owner of a restaurant this really takes the cake. As a shot in the dark here, any idea how to respond if GrubHub lists you without authorization?
I have heard unverified story from a Vietnamese restaurant, where Grubhub listed higher prices to overcharge customers on their platform.
It’s not “higher prices,” it’s mark-up so they can make money. What does the restaurant care of they are getting their money for the food?? Maybe they should get delivery drivers then if they don’t like it. I’m tired of whiners.
And SOME of you cheap arse people need to start learning how to tip if you want food delivered to your door.
Drivers for ALL food platforms Use THEIR OWN CAR, PAY FOR THEIR OWN GAS, put wear & tear on their car and get paid only $2-$3 for a delivery from the companies. The rest is whatever tip YOU add. If you are going to add $0-$5, it’s not even worth the drive, I decline anything under $10. And if I accidentally take something & then Notice The customer tipped $0, I will drop the order…. some drivers will even spit in in. Delivery to your door is a LUXURY, so if you can’t add on $10 for a tip, GO GET IT YOURSELF!
Not all of that is true I know for a fact The raising the prices yeah they do that along with DoorDash and Uber. But as. Far as 2, 3, and 4 I’ve not seen any of those like the phone number anytime I push phone number for the restaurant here whether they are partners or not I get the same phone number that I would get if I googled it and I’ve never seen any websites if you could give a link to a website that is controlled by GrubHub and prove that is controlled by GrubHub please let me know and the coronavirus markings places is closed they have not done that to unpartnered restaurants here they’re not marking them as close so this sounds like a personal vendetta against grab hub and I work for GrubHub and Uber I deliver food for both of them and like I said the only practice I seen from both of them is adding restaurants GrubHub does add restaurants that aren’t partnered with it but why would somebody care about getting money I mean what’s the difference between a person coming in off the street and using their credit card or a person coming in off the street and using GrubHub credit card are they not allowed to shop there just because it’s a GrubHub credit card the restaurant is still getting paid so why are they crying about it it sounds just like a prejudice thing to me.
Well the difference you are impling is 30%. But I always say you don’t give 30% how would you earn the other 70%
I worked for Grubhub and I quit because they are greedy and unethical. At every turn they disappointed me and continually updated policies with more bully tactics and conniving underhanded business. The owner is a snake and he knew all along it was an unsustainable business. He planned to prey, get rich, and then sell. That’s exactly what is happening too. AVOID GRUBHUB!!! HAVE DECENCY AND SUPPORT YOUR LOCAL BUSINESSES. GRUBHUB IS KILLING THEM!!!
Cedric, you ask why wouldn’t they want the extra business of being added to Grub Hub without consent.
It could harm their reputation to be associated with Grub Hub.
Also restaurants should go cash only to stop this Evil Empire takeover.
They have to squeeze out all cash businesses. That’s why they want all Illegals made legal. They still plan to kill them all but this way they can track everyone.
COVID19 is by design/engineered. They are making more. The COVID tests will help them make deadlier ones.
Anyone who puts the enourmous amount of time and energy into a business wants and deserves to control their business, otherwise their just somebody else’s slave. McDonald’s, Walmart, Uber, Grub Hub are all hiring.
Cedric,
I just thought of another reason to sue to not allow Grub Hub to take over your store front. If they boom, they can literally control YOUR customer base and close you down. Let’s say you complain about your percent. They don’t have to come bash your knee caps. They can just replace your business. Then what? You really want to be as independent as possible I believe.
It’s a big deal to control your own business. Otherwise you really don’t have one, you work for someone that does.
Ma’am, everything you said is true but the way you perceive it and the way you speak about it is negative none of its negative in fact it’s a common practice amongst businesses to list companies in there directly without them knowing it’s common it’s still common there’s a company that helps you to push all your information out to the public and fix it on directories for a monthly fee so is very much accepted it is not crooked and you made them look extremely cricket in there not read this article I’m telling you right now your perception is absolutely incorrect that is common business practice they’ve done and nothing wrong man they’re trying to build a huge business and you’re out here complaining about it but I bet you order from the game what’s your beef with it why don’t you talk about your actual beef with GrubHub if you don’t have one why are you trying to put him under the bus gosh they were number one they they’re good company I have no problem whatsoever. I have had problems with all these other had problems with this company really really great to work for and they’re good people and you’re bashing him about things that are common in every single delivery service you said GrubHub is the only one that is a lie…the article is correct but you the way you present is horrible it is common practice GrubHub is done nothing wrong but you have made them look very bad here. Was that much to you absolutely you know what leave them alone they’re just trying to do our birthdays work nobody’s cheating anybody the system is in place and it works very well if restaurants are complaining it’s cuz they don’t get enough orders and it’s a nuisance but there’s a lot of companies out here that get tons of orders for GrubHub a nice only reason they’re staying in business so if I were you I just honestly can it go find somebody else to pick on don’t pick on big company this trying their best to make it and do an honest day’s work I’m your hardness drivers you something you make us look bad like what she do people stop talking about it it’s a delivery service it’s real simple it’s not like it’s that hard there’s no there’s no laws being broken there’s no shadiness you’re not trying to do anything but get as many restaurants on their platform as possible so they can offer their customer the most widest variety of options that is not wrong that’s at the end of the day I hope the restaurant his things are going delivery you can’t stop it so do you want the restaurant to be involved or not and if they weren’t involved before Corona they would have been real screwed wouldn’t have said thank God they put them in the directory listen think about what you say before you say this article is horrible I got some things you can help me with their actually meaningful that will help to get some things done in the world for instance I’m immigration plan that I save half the budget 666 billion dollars let’s talk about that
There’s these things called sentences and commas. You might try them.
You have no idea what you’re talking about! Should sit down and shut up when you have no clue. ALL big business take advantage of their customers and cheat them as well which is how they maintain their business! People are running around breaking their necks to keep businesses open that constantly give you short end of the stick! Smh…
What happened to actual journalism ???? So you all just submit to get paid?? Every single one of these delivery companies is screwing over the american people during the pandemic!!!!!!!!!!!!
Look you the people have chosen to use these apps ,they were created to be convenient for the customer and vise versa nothing in life is free the restaurant chose to partner with the app and there for will half to pay a price it is a brilliant idea what these people have created the same applies to so called Uber and Lyft however they to take total advantage of both customer and driver nowhere on the face of the planet could a cab company charge you triple for your ride and there thought process is well how are you going to prove it and unfortunately that does not stop people from clicking the button now does it so yes all these apps are shady to a degree but again we the people have allowed it to happen buy using them it’s amazing that Uber and Lyft got away with what they were doing for so long well it does my heart good to see them going down interesting ,that Uber wants to buy GrubHub probably because so called ride share is done so now there trying to save face by trying to gobble up the food market which I can assure you do not want that to happen because just like the game they played with ride share they would do the same with the food the gov in Minnesota is going to make sure that does not happen think God there is someone looking out .
I am not defending her in anyway. But back then before GrubHub and seamless had made deliveries. They would always listed they’re own generated phone number so whenever someone call the restaurant will get charge. The writer should do a fact check because a lot of things she wrote is not true.
A lot of things the writer write are untrue. Restaurants and other delivery companies can’t not charge you more than dine-in price. Restaurant can be sued for that.
The only delivery platform that sella takeout without a restaurant consent or having a restaurant site made is Postmates.
A lot of people complain about the 25-30% I mean it’s high but a lot of restaurants rely on deliveries just to pay rent.
1. Lists restaurants with marked up prices.
So, you’re saying GH should be driving traffic and customers to the restaurant for free? As what, some sort of entitlement?
1a. Without their permission. GH is a directory, among other services, and the restaurant is open for business. This is not very different than saying, “Hey John can you run by Sushi Time and pick me up a couple California rolls? I’ll kick you ten bucks for the favor.”
Replace John the friend with GH and you have the exact same scenario. People pay their personal assistants to run errands for them all the time, why can’t GH become the assistant?
2. Replaces the restaurants phone number.
This doesn’t happen “magically”. Obviously those phone number listings on Google, Yelp or other platforms are open for advertising. GH pays to advertise in those spots. If you’re going to blame GH for this practice, which I agree is bad for the restaurants, then you should also blame the platforms making money off selling the ad space.
3. Dummy websites. It’s not a dummy website, because it’s working and driving traffic which in turn drives orders. It’s obviously outperforming the restaurants own website, if they have one.
Since traffic drives orders, again, should GH do this for free?
ANY time a business (or person) enters into a contract they should fully understand the contract. ANY time a business signs up for a service they should fully understand the impact of using that service.
Ultimately this is not something GH hides in their contract. They have as much incentive to drive order traffic as the restaurant has to make and sell the food.
If they were charged some sort of outrageous fee for the microsite, and actively hid the fee from the restaurant, then I could understand the outrage.
But if I said I was going to build you a website to drive leads, and you only paid me a commission when a lead bought something, you would think it’s a good deal.
GH is often effective at outranking the restaurant on search platforms, the problem becomes the restaurant doesn’t want to pay the commission THEY AGREED TOO.
4. Freshcraft listed as closed. Well, they were listed as closed on GRUBHUBS platform, right?
Who paid to build, run, maintain and acquire customers to Grubhub’s platform? It certainly wasn’t Freshcraft. So once again, one company invests it’s capital and resources to build a business, market the business, invest to acquire customers, and the other company expects to receive those benefits for free?
I admit, listing Freshcraft as closed, on GRUBHUBS platform, to GRUBHUB’S customers is not a nice move.
But let me repeat, those are GRUBHUB”S customers, that GRUBHUB invested money to bring onto their platform.
Again, should they just give away their services for free?
I understand the consequences to Freshcraft. But if it was a Freshcraft customer, they can easily call the restaurant directly or visit their website. Or if Freshcraft had a social or digital.marketing strategy, presumably their customers would already know they were open.
GrubHub is actually acting as a good partner in this instance, for the companies who agreed to partner with them. Does it hurt Freshcraft? Possibly.
Does it help Freshcraft’s competitors who decided to partner with GrubHub, absolutely. Those GrubHub partners are getting value from their patter with that tactic, against their competitors, as a result of the relationship.
Also, on an operational level, let’s say they had Freshcraft listed as open. A customer who wanted to order from Freshcraft, through GrubHub’s platform mind you, would have to go through process number 1 listed in your blog post.
Which presumably Freshcraft doesn’t want to have to deal with since they declined partnering with them in the first place.
The real solution for Freshcraft? Ask to be delisted from their platform. As the law sits currently, it’s not illegal to create a directory of publicly available information. That’s just the reality of our laws at this time.
Another reality is that being a restaurant owner also means you’re in competition with other entities.
This hyper-negative narrative about the delivery platforms comes across to me as a bunch of sour grapes from business owners who can’t, won’t or don’t provide what the market is demanding, (online ordering, delivery) don’t know how to effectively provide those services and don’t effectively compete in the digital marketing realm.
They are taking an entitled attitude that they, the restaurant owner, is the center of the food universe.
These online ordering, search engines and delivery platforms are all things the market (their customers) desire and demand. They can either adapt to provide and compete, or close up shop.
To sum it up with a metaphor. Many people these days, especially younger generations, don’t like to carry cash. They like the convince of being able to purchase things using a credit or debit card. Shoot, even cell phones and smart watches, these days.
This is driven by consumer behavior, not some crazy conspiracy theory that Visa and MasterCard are out to get merchants.
A restaurant or bar can opt out of servicing that segment of the market and only accept cash. Many do, and do so successfully.
Any restaurant can refuse to do delivery or take-out if they choose. And yes, they can even refuse to take orders from GrubHub, Doordash or Postmates.
I’m not saying there aren’t operational issues and competitive disadvantages for independent restaurants. They’ve always had them, and they always will. But there are also unique advantages they can use as a value proposition.
If anything, the ease of access to multiple digital marketing channels provides small restaurants a better opportunity to compete against the big boys.
Should they chose to try.
The customers are clearly asking for the market to be disrupted, and the delivery platforms are happy to service those customers.
But don’t cry me a river if you fail to recognize the change in consumer desire, don’t even try to compete or fail to do so.
Accountability, personal responsibility, competition, entrepreneurship, a “can do” attitude. It’s the American Way, right?
Is their proof of this or is this the usual copy and paste from a prevoious article written by a millinial intern trying to make ad revenue.
In Canada Uber are now charging restaurants 30 to deliver!
It’s a web of greed. When you tip your delivery driver on the app. You are actually tipping the delivery company, not the driver. $1 – $5 – $10. -$20 -$50. It 100% goes to the company. This is disclosed on the corriour app but not on the app to order food. This is for obvious reasons. No one is going to tip if they know it’s not for the delivery person.
Hello, I am a GrubHub driver, and yes there are some restaurants that we use that are not partnered with GH, however, postmates and doordash do the same thing. We have to order the food and then pay the restaurant with a company GH card, that as been preloaded for this purchase. And yes every business increases the price of the products to make money. That’s called capitalism. Its what makes this country great! I hope this helps. All of our tips goes to the driver from the app. both DD and Grubhub. I cannot speak to other apps.
I ordered a 10$ MacDonald burger meal thru grubhub and by the time i went to check out it was 32$. No thanks…gouging to the max.