Grubhub announced last week that, between the hours of 5 to 9 PM, customers could order takeout or delivery through its platform and receive $10 off orders of $30 or more. It sounds like a good deal, until you realize that while Grubhub is promoting the offer on behalf on restaurants, it’s also contractually forcing those business owners to eat the cost of that discount for every eligible order. (Disclosure: my parents are restaurant owners that list their business on Grubhub / Seamless.)
Under Grubhub’s Supper for Support program terms and conditions, the fine print says that while restaurants must opt into the program, they also have to agree to fund the $10 discounts — or roughly 30 percent off the cost of one order if the customer just meets the $30 minimum. On top of that, they must allow Grubhub to charge them commission for the total cost of the order before the discount.
If the business owners want to opt out, they have to send in a form for every location if the restaurant has multiple locations, and wait two days for processing.
Though Grubhub is upfront with businesses about the terms, the move is being criticized as an attempt to profiteer from business partners that are struggling under the nationwide measures to limit the spread of the novel coronavirus. Restaurants have been forced by these measures to indefinitely close or to reduce their service to takeout and delivery only. To continue operating, businesses have had to rely on online services like Grubhub, Doordash, Caviar, Postmates, and UberEats to assist with orders and deliveries, although many restaurants are urging customers to help them avoid fees by ordering direct. (Grubhub says it will postpone charging commission fees to independent restaurants in select cities, but will eventually still collect them at an undisclosed time.)
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
When reached for comment, Grubhub told The Verge the promotion is helping boost sales for restaurants. “Grubhub is always looking for ways to increase sales for its independent restaurant partners, especially during these critical and challenging times.
The company did not elaborate on why it has chosen to pass on the discount costs to restaurants while also billing commission fees on the non-discounted total.