GrubHub moves into food delivery

GrubHub is getting into the delivery business.

For the past decade, the Chicago-based technology company's primary business was providing an online platform for restaurants to accept orders. Now it's going to offer delivery service, too.

GrubHub said this morning during an earnings announcement that it's buying two restaurant-delivery services—Dining In and Restaurants on the Run—for about $80 million. That means GrubHub, which provides order-taking capability for 30,000 restaurants, will offer delivery services for about 3,000 restaurants.

http://www.chicagobusiness.com/article/ ... d-delivery

Problem is it costs the restaurants around 20% and won't allow you to add the expense into the pricing. Just had a meeting last wk about it. So already low margins are even lower.

Jazzfood wrote:Problem is it costs the restaurants around 20% and won't allow you to add the expense into the pricing. Just had a meeting last wk about it. So already low margins are even lower.

Just for my own curiosity - is it a better (more profitable) option for a restaurant to run their own delivery crew at regular menu prices instead of getting (perhaps) greater exposure through GrubHub?

Prob cheaper but less exposure to impulse buyers. There's expenses/liabilities doing it yourself as well. We actually priced a menu adding in the new expenses which made sense to us but they wouldn't allow. Going to give it a try to see if we make it up on volume.

Doing business with GrubHub as a customer is infuriating. It's the toll extracted for laziness and convenience. Doing business with them almost never works out satisfyingly, or even acceptably.

It seems that no problem, no matter how large or small, is one for which GrubHub willingly takes responsibility. For not the first, second or third time, I recently had an order that I placed with GrubHub show up exceedingly late -- in this case -- nearly an hour late. I knew, because the restaurant called me to say the food had been sitting at their establishment for nearly a half-hour, that the fault was with GrubHub. Even more annoyingly, I received this call after some anonymous drone-bot at GrubHub texted to inform me that the order had been picked up.

Unsurprisingly, when the food finally showed up, it was ice cold, soggy and spent. I decided to contact GrubHub since this was clearly their error. When I finally reached a live person there, no easy task, she was incompetent, clueless and impotent. She kept telling me that she was going to make it right by putting some free "grub" in my account. I had to ask her several times how much free "grub" she was talking about. When she finally revealed that I'd be receiving a $5.00 credit (on a $60+ order), I'll admit that I politely went ballistic. I explained as calmly as I could that since this was clearly GrubHub's fault, that wasn't an adequate solution.

I hung up and decided that I might do better going through their online live chat conduit. After a lengthy back-and-forth with a CSR there, I was able to extract nearly a full refund for the order. I say nearly because in the end, GrubHub would not refund the charge for their service, even though it had been entirely unacceptable and arguably dishonest.

Here's an excerpt from the transcript of my chat with the CSR:

(02:24:05) me: why not for the full amount, if I may know?
(02:24:32) CSR: The processing and delivery fee. The meal was delivered and the processing is for using the GH service.
(02:25:34) me: considering the circumstances, GH should be the first party willing to give up their fee
(02:26:51) CSR: I totally understand that thought. And I will be sure to pass on the suggestion
(02:27:07) me: i mean, saying the food was picked up when it hadn't been is hardly worthy of charging the customer a fee
(02:28:52) CSR: One moment please

The chat went on for a brief time after that without resolution and concluded with fake pleasantries on both sides.

At first, my goal was far more modest -- hell, maybe a simple apology would have sufficed -- but the longer I had to plead my case, the more insistent I became. Motivating me was GrubHub's abject unwillingness to accept responsibility for their error, as well as their possible attempt at deception in the matter. It was pretty clear that the food had not been picked up even after they'd informed me that it had been.

Conversely, Caviar, which I'm guessing is a much smaller player in this market, and which, admittedly, seems to charge more than GrubHub, has been nothing short of wonderful in resolving issues. I haven't had many but a couple of times when I've reported missing or incorrect items, they've voluntarily offered full refunds. In fact, I've never asked for a full refund from Caviar yet I cannot remember an instance where one wasn't proactively provided by them. So while there are downsides with Caviar, they seem to be far more focused on customer satisfaction. GrubHub comports itself with the attitude that customers have no alternative but to use them. Well, customers always have alternatives. Always.

It's convenient to order food online. And in some cases, especially when there's a language barrier, it can be a fine option. But in the end, ordering via GrubHub provides virtually zero advantage over simply calling a restaurant and ordering from them directly. It costs more, it costs the restaurant more and it puts a disinterested bullying party between the restaurant and the customer. I guess this is the wave of the future but if GrubHub ever becomes the only conduit through we can order delivered food, it'll be a sad day for all of us.

=R=

ronnie_suburban wrote:it was ice cold, soggy and spent.

<censored response>

Hi,

I will guess the refund they offered will result in the restaurant who prepared the food not getting paid.

Since the restaurant alerted you the food was waiting for GrubHub to collect, it seems especially poor form GH made sure they themselves were whole.

Why not take issue via your credit card company?

Regards,
Cathy2

Cathy2 wrote:I will guess the refund they offered will result in the restaurant who prepared the food not getting paid.

I thought the same thing but wished to be wrong. I felt that if I'd cancelled the order, the restaurant would be left holding the bag (so to speak) entirely. I hoped that by demanding a refund after taking delivery, the restaurant might get paid since they did prepare the food within the promised time frame.

Cathy2 wrote:Since the restaurant alerted you the food was waiting for GrubHub to collect, it seems especially poor form GH made sure they themselves were whole.

Yes and bordering on unethical, imo.

Cathy2 wrote:Why not take issue via your credit card company?

It's my experience and understanding that if the delivery of the goods was made, I'd have no recourse with my credit card company. If it happens again, I'll likely try, though. That said, I'm now actively working to eliminate GrubHub from my life. They're not worthy of my business because they're parasitic barnacles.

=R=

Hi,

My sister lives on a farm located about 10 miles from a big town and 5 miles from a little town. Delivery? Never. A 10-20 mile round trip for pick up or going out to eat can be a pain.

Two weeks ago, she discovered she can order food delivered. This news was as astonishing to me as it was to her. Where she lives is truly under served, though it is understandable why. Never thought she would be in anyone's delivery range.

Regards,
Cathy2

I received an update to my car insurance policy today. Geico has completely reworded their standard policy to specifically exclude and coverage for vehicles used as ride shares or any delivery service for which you are compensated or that you have to declare on your taxes.

They made a lot of changes, no loopholes were left. Even short term leases and rental exclusions were added.

I called my State Farm Agent about Diving for Uber, all he said is that they highly recommend that I don't

Uber Technologies Inc. has made an offer to acquire food-delivery startup Grubhub Inc., according to people familiar with the matter, Bloomberg News reports.

https://www.bloomberg.com/news/articles ... over-offer

If you believe GrubHub, you might think a new, likely independently owned (semi?-)authentic pizza restaurant has opened in Skokie. But it's just GrubHub's alias for Chuck E. Cheese.

Though it's a few weeks old, I came across this Food & Wine article today, with third-party delivery app scrutiny all the rage.
Trying to Support a Local Pizza Joint? Just Make Sure It Isn't Actually Chuck E. Cheese

user named u/KendallNeff placed a Grubhub order from a place called Pasqually's Pizza & Wings, believing that she was doing her part to support a local business. But when she received her food, she was slightly suspicious about where it really came from. "Just curious," she texted her Grubhub driver. "Was this food from Chuck E. Cheese?"....
Philadelphia isn't the only place where Chuck E. Cheese is offering to-go pizza from "Pasqually's." There are dozens of Grubhub listings for Pasqually's, from Denton, Texas to Oceanside, California, to Skokie, Illinois, and all of them share an address with Chuck E. Cheese.

If you thought this would cause a course correction, you'd be wrong. Pasqually's Pizza & Wings remains a result among Skokie pizza options.
Pasqually's Pizza & Wings
h/t to G Wiv for posting links with a specific label so I can see how it's done.

Anyone see this funny and sad piece on Doordash and their economically counterintuitive practices?

https://themargins.substack.com/p/doord ... -arbitrage

bweiny wrote:If you believe GrubHub, ...

If you believe Chuck E. Cheese, that is.

Vitesse98 wrote:Anyone see this funny and sad piece on Doordash and their economically counterintuitive practices?

https://themargins.substack.com/p/doord ... -arbitrage

Great article - thanks for sharing.

I had a big problem with a delivery order placed through Uber Eats to a board favorite.

An hour after ordering, hungry, and wondering where my food was, I look at the app and see that the order had been cancelled. No explanation given. I called the restaurant and they said they are on Grubhub, but not Uber Eats. When I placed the order through Uber Eats, the driver *drove* the restaurant to place the order in person. When told it would take 30 minutes to cook, the driver cancelled it. The restaurant host was incredibly apologetic, but was also incredibly upset that this can happen.

Vitesse98 wrote:Anyone see this funny and sad piece on Doordash and their economically counterintuitive practices?

I read that one too yesterday. Last place I saw a price disparity like that was a pizza place called Vinnie's on Waukegan Rd in Glenview. Food looks good, but I haven't tried yet.

Vitesse98 wrote:Anyone see this funny and sad piece on Doordash and their economically counterintuitive practices?
https://themargins.substack.com/p/doord ... -arbitrage

Picked up by the BBC:
Man makes money buying his own pizza on DoorDash app

bweiny wrote:If you believe GrubHub, you might think a new, likely independently owned (semi?-)authentic pizza restaurant has opened in Skokie. But it's just GrubHub's alias for Chuck E. Cheese.

Though it's a few weeks old, I came across this Food & Wine article today, with third-party delivery app scrutiny all the rage.
Trying to Support a Local Pizza Joint? Just Make Sure It Isn't Actually Chuck E. Cheese

user named u/KendallNeff placed a Grubhub order from a place called Pasqually's Pizza & Wings, believing that she was doing her part to support a local business. But when she received her food, she was slightly suspicious about where it really came from. "Just curious," she texted her Grubhub driver. "Was this food from Chuck E. Cheese?"....
Philadelphia isn't the only place where Chuck E. Cheese is offering to-go pizza from "Pasqually's." There are dozens of Grubhub listings for Pasqually's, from Denton, Texas to Oceanside, California, to Skokie, Illinois, and all of them share an address with Chuck E. Cheese.

If you thought this would cause a course correction, you'd be wrong. Pasqually's Pizza & Wings remains a result among Skokie pizza options.
Pasqually's Pizza & Wings
h/t to G Wiv for posting links with a specific label so I can see how it's done.

A lot of restaurants are doing this lately - listing alias restaurants under their primary address on Grubhub. It bothers me that Grubhub seems to be deliberately deceptive about this practice. The alias restaurants are often missing an address so you can't tell unless you google the name - then it will show up. My guess is that GH is the one suggesting it to restaurants, since they would have to approve of listing multiple aliases under one account, and because it's such an odd, tech-y algorithm-y thing to do.

Many of the alias restaurants have poor reviews, and this might be because they are often very generic, which is probably necessary when trying to serve 2-20 different menus out of one kitchen. Here are some I found that deliver to Rogers Park, and there could be more:

Sarpinos - 2428 Main St, Evanston - this is basically the same Sarpinos menu under a different name
Alias on Grubhub: Dough Factory

Dat Pizza Dough - 750 Chicago Ave, Evanston
Alias: Stix n Stuff

Niko's Grill -1215 w Devon
Aliases: Boxers Chicken - Wrap Me Up - Chicago Italian Beef - Pasta Factory - American Jerk

Papa Rays Pizza and Wings - 4757 n Sheridan
Alias: Absurd Bird

Taco in a bag - 4603 n Lincoln - this makes a little sense - the alias is serving a version of what they already do
Alias: The Nacho Dispensary

Sanabel Bakery - 4213 n Kedzie - this one is odd because I don't think Sanabel itself is even on Grubhub, but they have all these random cuisines offered on there, so maybe I'm missing something? I'll correct if this is wrong
Aliases: American Jerk - Yummy Kabobs - Extreme Sandwiches - Max's Gyros - Spaghetti Bowl - Moroccan Delight - Ramen Noodle Bowl - Chicken Shaq - Flamingo - Fresh Catch - Persian Room - Tunisian Fusion - Burrito Bowl - Main Spain - Garden of Eden - Paul's Peirogis - Rita's Fajitas - Juanitos Burritos - Papa Pork - Taylor Street Dogs - Brazil Bowl

Si Pie Pizzeria -5505 n Lincoln
Aliases: Famous Brown's Fried Chicken - Burger Mania - Wingz n Thingz - Chicago Street Eats

Candlelite Pizza - 7452 n Western - this one I kind of get, since their alias focuses on one section of their menu, and they do have good burgers
Alias: Burger Town

Just Eat Takeaway to Acquire Grubhub for $7.3 Billion

https://www.nytimes.com/2020/06/10/tech ... t-eat.html

Just Eat Takeaway to Acquire Grubhub for $7.3 Billion

Market cap was only $5.3B during trading. Congrats to the winners, but this is an industry I want to see crash and burn. I'm not holding my breath in the slightest though.

It doesn't seem like it should be rocket science for the restaurant industry to fund coding for a platform that they can all use that takes no cut. The lack of an aggressive counter-attack from the victims has been sad.

bweiny wrote:It doesn't seem like it should be rocket science for the restaurant industry to fund coding for a platform that they can all use that takes no cut. The lack of an aggressive counter-attack from the victims has been sad.

The problem is that the "Restaurant Industry" isn't a single voting bloc. Even if they all feel the same way, there's no muscle there: Each restaurant negotiates with GrubHub, and not from a place of strength: "If you want your food delivered, do what we say - the next pizza place down the street caved, they'll get your business."

I'm sure the chain restaurants, and maybe bigger groups like Lettuce, One-Off, Boka, are able to negotiate better terms. But without some union-like negotiating body where they can say, "None of us will let you deliver our food unless you give us these terms", the best hope might be lobbying for state regulation of those delivery services.

Giving the delivery service a small cut is not unreasonable: They're providing marketing in addition to the delivery. But the size of the cut should be based on service-level agreements: customer ratings, volume, etc. The 30+% kickbacks I'm hearing about just aren't sustainable for the restaurants.

JoelF wrote:The problem is that the "Restaurant Industry" isn't a single voting bloc. Even if they all feel the same way, there's no muscle there: Each restaurant negotiates with GrubHub, and not from a place of strength: "If you want your food delivered, do what we say - the next pizza place down the street caved, they'll get your business."

I'm sure the chain restaurants, and maybe bigger groups like Lettuce, One-Off, Boka, are able to negotiate better terms. But without some union-like negotiating body where they can say, "None of us will let you deliver our food unless you give us these terms", the best hope might be lobbying for state regulation of those delivery services.

Giving the delivery service a small cut is not unreasonable: They're providing marketing in addition to the delivery. But the size of the cut should be based on service-level agreements: customer ratings, volume, etc. The 30+% kickbacks I'm hearing about just aren't sustainable for the restaurants.

I understand the practical reality you describe. My vague "restaurant industry" term was meant to suggest trade groups and whatever other organizations would be paying for lobbyists to push for regulation, directly fund the tech, because it seems like the return on that investment would be much greater. Restaurant owners would be wise to at the very least try and join others of similar size/scale in common geographic areas before ever negotiating with GH, UE, etc. alone. They're such a common enemy, the failure of firms to act in their own best interest by pooling resources is what bothers me.

To be honest, because these restaurant businesses could be doing more on their own along these lines, GH has a strong case, one I ironically would have to take their side on, that government coming in to interfere in the market by essentially picking winners and losers when these private companies aren't doing what they could through the market, is wrong. This isn't to say GH et al aren't or shouldn't be vulnerable to antitrust action if consumers can make the case that way.