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:
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).
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 การุณรังษีวงศ์ (@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!
“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!