Grubhub is being accused of draining restaurants of their profits via the commission fees it continues to demand during the ongoing COVID-19 lockdown orders in the US. Some on social media are now weighing up the benefits of supporting a service that appears to be taking such a large cut from restaurants during a time when many are struggling to stay in business.
With the coronavirus pandemic forcing people to stay at home, delivery services have seen a huge rise in popularity. Everything from food and groceries to even COVID-19 test kits are being delivered so that people don't have to leave their home. Dining at restaurants has not been an option in most states for the last several weeks and this has meant a record number of orders through food delivery apps, such as Uber Eats and Grubhub. The long lockdown has even pushed 'fine-dining' reservation apps like Tock to launch food deliveries to support the more upmarket restaurants that the service caters to.
With the current pandemic in mind, it is no wonder that Grubhub has reported a record revenue of $363 million in the first quarter of this year. However, as BuzzFeed reports, the restaurants are expected to lose around $240 billion by the end of 2020. It is this discrepancy that has caused some people to come forward criticizing the popular take-out platform for fleecing the restaurants, especially smaller joints, using their commission fees. While not exactly a new issue, the restrictions brought on by the pandemic have exasperated the situation for restaurateurs, and platforms like Grubhub seem to be cashing in. This was recently demonstrated by a Chicago Pizza Boss invoice shared by Susie Cagle on Twitter.
Should Grubhub Be Doing More To Support Restaurants?
The receipt highlights how little the food outlet is getting from 46 orders worth a total of $1042, once accounting for the Grubhub commission and processing fee. This is a serious issue at the moment as eateries are largely dependent on food delivery apps for their business. However, charging an enormous amount and destroying whatever little profit they are getting is hardly helping. Interestingly, this would seem to fly in the face of Grubhub's recent COVID-19 advertisement that waxes lyrically about the importance of restaurants to a community and how they are "our family." The promo spot even ends with the tagline: 'Together, we can help save the restaurants we love."
While no one expects Grubhub to totally offer its services for free, there does seem to be some discrepancy between what the company says and what it does. For example, it is easy to put the emphasis on consumers supporting local restaurants but when a significant portion of that support is not even going to those local restaurants in their time of need, it raises serious questions. As to be expected, many on social media have not responded well to the original receipt Tweet, with some suggesting how consumers and local restaurants would both be better off cutting out Grubhub altogether, and especially during the coronavirus pandemic.
Source: BuzzFeed