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Grubhub has added scores of new restaurants on its platform in an effort to fend off competition in the growing app-based dining market.
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But there's a caveat.
The newcomers aren't being charged the same service fees and commissions that Grubhub's current eateries face, leaving restaurant owners — who bear the cost — enraged.
"This is a huge deal for businesses that are currently paying them commissions that can range from 15 to 40 percent," Michael Lombardo, owner of the pizzeria Il Mattone, told FOX Business. "They’re now competing with restaurants on the platform that are not paying that same amount."
Lombardo says the restaurants that aren't paying, which GrubHub refers to as non-partners, are "basically getting a free ride" since they're not ponying up the money that so-called partners have. On the other hand, app users who order from non-partner restaurants will pay more since the eatery isn't subsidizing any of the expense.
Adding non-partner restaurants benefits Grubhub, at least in the short term, by keeping its users from drifting to other apps with a wide selection of dining options. The company says it can benefit partner restaurants, too, by increasing the number of consumers on the app, but not all partners are convinced.
Lombardo asked Grubhub to switch his restaurant's account to non-partner status but the company said it was not able to do that.