GrubHub is facing accusations that it is using a promotional discount to take financial advantage of restaurants at a time when many food establishments are relying heavily on delivery services to stay afloat due to the Wuhan coronavirus pandemic.
At the heart of the accusation is GrubHub’s policy as posted on its website saying that restaurants choosing to participate in the discount must allow Grubhub to charge a commission on the non-discounted total rather than the amount paid by the customer.
The policy is being decried by some on social media as an unfair business practice that bilks restaurants at a time when many of them are struggling to survive. States including New York, California, Florida, Illinois, and New Jersey have ordered restaurants to effectively close their dining areas, forcing establishments to rely on carryout or delivery service.
The New Yorker food correspondent Helen Rosner is among those calling out GrubHub for what she sees as a predatory business practice.
Grubhub strongarming client restaurants into giving customers a discount, but charging restaurants their platform commission fee on the pre-discount total. Totally cool, not dickish, not predatory in a time of crisis at all. A++ @Grubhub nice work, totally defensible https://t.co/VBiQPbtmyk
— Helen Rosner (@hels) March 30, 2020
But GrubHub said in a statement sent to Breitbart News that the promotion is completely optional for restaurants. The company also said that restaurants that choose to participate have seen a significant bump in orders.
“Grubhub is always looking for ways to increase sales for its independent restaurant partners, especially during these critical and challenging times,” a spokesman for the company said in a statement.
“The optional Supper and Support effort does exactly that. In fact, local restaurants that chose to participate in the optional initiative have, on average, seen a more than 20 percent increase in the number of orders they have received as well as overall sales. We are proud of that and will continue to try to connect them with hungry diners and grow their businesses.”
The criticism follows GrubHub’s recent announcement that it will delay the collection of $100 million in commission fees from certain restaurants as a gesture of goodwill during the pandemic. The waiver applies only to “independent” restaurants, which are those that aren’t part of a chain.
But some have dismissed the move as a public relations gesture since the company is expected to collect those fees at some point in the future.
Competitor DoorDash recently announced that restaurants new to its service can sign up and pay zero commission fees for a month. Some restaurants that are already signed up are eligible to pay reduced fees on delivery orders and won’t be charged for pickup orders. But DoorDash hasn’t said how long the relief period will last.
Silicon Valley delivery services have been in the spotlight since states began curtailing restaurant service in the wake of the coronavirus outbreak.
But a lot of the media coverage has focused on driver safety, with some saying that companies don’t provide sufficient protection against the coronavirus. Instacart shoppers were expected to walk off the job on Monday as part of a strike protesting what they see as a lack of adequate health safeguards.