News Category: Policy

Grubhub Partners with Amazon Key—Simplifying Third-Party Deliveries to Residential Buildings

New Service Enables Seamless Entry for Authorized Grubhub Delivery Partners at Amazon Key-Enabled Buildings

SEATTLE—Oct. 21, 2024—Amazon Key today announced a partnership with Grubhub for a new service called Amazon Key Third-Party Deliveries. Grubhub delivery partners can now leverage Amazon Key’s 1-Click Access technology to gain authorized entry to common areas of Amazon Key-enabled buildings and gated communities to complete their deliveries. 

“For years, Amazon Key has transformed how Amazon deliveries are made within restricted-access buildings, providing a seamless experience for building staff and delivery drivers alike. We’re excited to now extend that same convenience to Grubhub,” said Kaushik Mani, Director Amazon Key. “As online shopping continues to grow, the influx of packages presents new challenges for delivery drivers and building management. Amazon Key is proud to be at the forefront of offering a frictionless, secure solution for deliveries within building lobbies and gated communities. Our customers have asked for an expanded service that accommodates third-party delivery companies, and we’re thrilled to meet that need, making delivery access more efficient and manageable for everyone involved.”

Grubhub has successfully completed nearly 1 million deliveries using Amazon Key, significantly enhancing the company’s delivery operations. By utilizing Amazon Key, Grubhub has reduced delivery partner care team calls by over 50 percent and seen a 22 percent decrease in order cancellation rates, streamlining the delivery process and improving efficiency. In a recent internal Grubhub survey, 72 percent of Grubhub drivers reported Amazon Key provided quicker access to delivery locations, and over two-thirds of delivery partners rated their overall experience with the service a 5 out of 5. This innovation is not only benefiting delivery partners, but also Grubhub customers, who enjoy the convenience of secure, hassle-free deliveries without the need to coordinate access.

“Amazon Key has had a tremendously positive impact on our operations and greatly improved the experience for our delivery partners,” said Megan Mergener, Senior Director of Logistics at Grubhub. “They are completing deliveries more efficiently and with fewer issues, which has translated to smoother experiences for our customers. The reduced need for coordination means less friction at every stage, allowing us to deliver easily and securely while giving customers and property managers peace of mind. We look forward to continuing this partnership and building on the success we’ve seen so far.”

Benefits of Grubhub Delivery with Amazon Key:

  • Enhanced Security: Only the single Grubhub delivery partner who is assigned a delivery at an Amazon Key-enabled building will gain time-bound access to the common area of that particular building. Authorized property managers have to opt in to the Third-Party Delivery service. Once opted in they have full control over enabling Grubhub access to their building and can revoke it at any time. They can also review Grubhub delivery partner access history for their building in their Amazon Key dashboard.
  • Improved Delivery Efficiency: Grubhub is able to operate more efficiently with contactless drop-off of customer food deliveries within the building. This eliminates the need to coordinate with building staff or wait for manual access, ultimately reducing delays.
  • Frictionless Resident Experience: For residents, this integration means fewer missed deliveries and less hassle coordinating with Grubhub drivers for package handoffs. This technology is designed to minimize disruptions while enhancing the convenience of modern living.

Privacy and security are foundational to how Amazon designs every experience. Amazon Key Third-Party Deliveries was created with layers of protections that keep customer privacy, safety, and security at the forefront. This includes requiring comprehensive background checks and verification processes for Grubhub delivery partners, and authenticated time-restricted building access to ensure residents can enjoy the convenience this service provides, worry-free.

Grubhub delivery with Amazon Key is provided at no additional cost to property managers or residents, and is maintained by Amazon Key. 

 

About Grubhub

Grubhub is part of Just Eat Takeaway.com (LSE: JET, AMS: TKWY), and is a leading U.S. food ordering and delivery marketplace. Dedicated to connecting diners with the food they love from their favorite local restaurants, Grubhub elevates food ordering through innovative restaurant technology, easy-to-use platforms, and an improved delivery experience. Grubhub features more than 375,000 merchants in over 4,000 U.S. cities.

About Amazon Key

Amazon Key empowers customers to easily manage access to their homes and businesses. Whether streamlining deliveries, giving customers control over who can enter their property, or letting them answer their intercom from anywhere, Amazon Key technology puts security, convenience, privacy, and access control in their customers’ hands. Amazon Key products currently serve single-family homes, multifamily properties, and commercial businesses across four continents.

Grubhub and Stride Announce New Portable Benefit for Delivery Partners

CHICAGO, October 1, 2024 – Grubhub, a leading online and mobile food-ordering and delivery marketplace, is excited to announce a new portable benefit offering with Stride, the category leader in portable benefits. This expanded partnership with Stride underscores Grubhub’s ongoing commitment to supporting its delivery partners by providing them with access to Stride Save¹—an individual benefits savings account designed specifically to help gig workers save and pay for health, retirement, and other costs.

Grubhub delivery partners now have access to no-fee² savings accounts through Stride Save, which can be used to cover essentials such as health insurance and retirement savings³. Additionally, delivery partners can explore a range of affordable insurance options, including dental, vision, and life coverage, tailored to fit different budgets and needs.

“We’re always looking for new ways to support the hundreds of thousands of delivery partners who make our service possible,” said Abhishek “PJ” Poykayil, Senior Vice President of Operations at Grubhub. “With the introduction of Stride Save, we are giving delivery partners access to the essential, portable benefits they want – on the road, off the road, and into the future.”

“We are excited to bring our newest innovation to Grubhub delivery partners and continue to fill the gap in access to benefits experienced by gig workers,” said Bryan Giaimo, Vice President of Partnerships at Stride. “Just because you choose to work independently shouldn’t mean it should come at a steeper cost.”

Key features of Stride Save include personalized savings goals, high-yield savings at 3.73% APYˆ, and quick, fee-free account enrollment. Delivery partners can easily sign up and begin managing their benefits in minutes without complex paperwork. Grubhub delivery partners should check their email for detailed instructions on how to sign up and access these benefits through the platform.

Open Enrollment for health insurance starts on November 1, 2024, with coverage beginning on January 1, 2025. Grubhub delivery partners are encouraged to pre-register with Stride to ensure they don’t miss important information and deadlines for affordable insurance. Last year, nearly 40% of Stride users received free health coverage based on their eligibility for tax credits, and 30% paid less than $1 per month for their plan.

For more information, delivery partners can visit our website or download the Stride app.

¹Stride Savings LLC is a financial technology company and is not a bank. Banking services are provided by i3 Bank, Member FDIC. The Stride Mastercard Debit Card is issued by i3 Bank pursuant to a license from Mastercard, Inc. and may be used anywhere Mastercard cards are accepted.

²Savings Goals are part of your Deposit Account with Stride. There are no current tax benefits associated with your Stride Save accounts and associated goals.

³No account or domestic transaction fees. Some foreign transaction fees may apply in limited circumstances.

ˆThe interest rate on your account will be 3.66% with an Annual Percentage Yield (APY) of 3.73%, and these rates are effective as of 09/19/2024. These rates are variable and based on the target range of the Federal Funds rate and may change at any time after account opening. Certain foreign transaction fees could reduce earnings on the account.

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About Grubhub:
Grubhub is part of Just Eat Takeaway.com (LSE: JET, AMS: TKWY), and is a leading U.S. food ordering and delivery marketplace. Dedicated to connecting diners with the food they love from their favorite local restaurants, Grubhub elevates food ordering through innovative restaurant technology, easy-to-use platforms, and an improved delivery experience. Grubhub features more than 375,000 merchants in over 4,000 U.S. cities.

About Stride: 
Stride simplifies the complexities of being an independent worker by creating a modern benefits system for individuals — regardless of their employment status — that they can take with them and to which companies can contribute but do not control. Stride is the first portable benefits platform specifically designed for the nearly 60 million American independent workers who do not receive employer-based benefits. The Stride platform offers access to insurance — health, dental, vision, life and other supplemental insurance — as well as financial tools to track income, mileage and other deductible expenses to manage their tax obligations, all via a single app. Since launching in 2014, Stride has helped more than 4.2 million workers save more than $7.2 billion on their taxes and monthly health insurance premiums.

Grubhub’s Commitment to Transparency

Twenty years ago, Grubhub set out to revolutionize the way people connect with their favorite local restaurants. Born from the frustration of sifting through countless paper takeout menus, our founders had a clear vision: to create a seamless online platform where customers could easily explore and order from a variety of local dining options. What started as a simple solution to a common problem has evolved into a platform that millions of people use every day. 

As we celebrate two decades of innovation, one thing has remained constant: our unwavering commitment to a great user experience. We believe that clear, straightforward communication is key to that, whether it’s ensuring our customers see all applicable fees upfront, empowering merchants to manage their own menus, or providing delivery partners with transparent delivery opportunities and earnings information. 

Let’s take a closer look at how Grubhub’s dedication to transparency benefits everyone involved in the food delivery process—from consumers to drivers to merchant partners.

What do customers see when ordering on Grubhub?

Making the ordering process simple and straightforward has always been a priority. To achieve this, we ensure that key information is clearly communicated to customers every step of the way. When customers search for what they’re craving and scroll through the search results, they’ll see essential information clearly laid out, including each merchant’s distance from their location and estimated delivery time. 

Delivery Fees

When the merchant uses Grubhub delivery partners to deliver, the delivery fee goes toward Grubhub’s delivery-related costs, including compensating the driver fairly. If the merchant uses their own delivery drivers, then the delivery fee goes to the merchant. Delivery fees are typically a fixed dollar amount and change based on a customer’s distance from the merchant.

Service Fees

Customers will also see a service fee at checkout, which helps cover Grubhub’s operating costs. Operating costs include everything associated with running a complex, three-sided marketplace, like making sure our customer-, driver-, and merchant-facing apps are running efficiently and having dedicated staff available 24/7 to support our customers, drivers, and merchant partners. 

Creating a group order with friends? Craving extra, EXTRA cheese today? Want fries with that? Building the perfect order is part of the fun of ordering with Grubhub.  Our service fee is calculated as a percentage of the total value of items in a customer’s basket, which is why it’s disclosed during the checkout process, once a customer has finished adding their items. 

Checkout screen

Service fee explanation prompt

Other fees

In some cases, customers may see a Small Order Fee if the total value of the order is low. This fee helps make delivery more sustainable for all involved, including our delivery and merchant partners. The fee goes away once a minimum order value is reached. 

In some jurisdictions, like California, there may be additional fees to account for things like driver benefits. These are always clearly disclosed during the checkout process.

Tipping

Finally, customers have the option to tip their delivery partner at checkout. Delivery partners always keep 100% of their tips for completed deliveries, and we strongly encourage tipping to reward good service!

What information is visible to Grubhub delivery partners?

When a delivery partner receives a delivery offer, they see the merchant’s name, address, the number of orders that are in the offer, estimated miles, and total pay. In some jurisdictions, where the law mandates, more details may be available to our delivery partners. Based on this information, delivery partners can decide to accept or reject an offer. 

Earnings from completed deliveries are reflected in real time in the Earnings tab of the Grubhub for Drivers app. Delivery partners will be able to see a list of all completed orders including the merchant’s name, earnings from the order, and a breakdown of their pay including base, tips, and any bonuses received.

delivery offer screen
Driver earnings tab

 

Our delivery partners are typically paid once a week. This payment encompasses the amount they earned during the previous week. They also have access to our “Instant Cashout” feature, which allows them to deposit up to $500 a day, almost instantly, for a small fee. As always, our delivery partners can learn more about ways to earn on the Grubhub for Drivers webpage.

What do Grubhub merchant partners see?

When it comes to our merchant partners like restaurants and retailers, Grubhub discloses the marketing fee, delivery fee, promotions, baseline costs of the food order, taxes, and other transaction costs in their statements. The fees charged by Grubhub and our offerings are clearly disclosed on our website. Merchants can choose the package that works for them, with each offering a slew of benefits to our partners, and with rates starting as low as 5%. They’re also welcome to change their package at any time.

Packages and commissions

At Grubhub, we are committed to transparency. For the past twenty years, we’ve stayed true to our roots, striving for clarity and simplicity for our customers, delivery partners, and merchant partners. By offering straightforward pricing, clear information, and no surprises at checkout, we ensure that everyone involved in the delivery experience knows exactly what to expect. As we continue to grow and innovate, our commitment remains the same: to make every interaction with Grubhub as transparent, reliable, and rewarding as possible. Here’s to many more years of serving our communities with honesty and care.

The Impact of “PayUp”: Unpacking Seattle’s Damaging New Delivery Law

Seattle’s experimental new minimum pay ordinance for delivery couriers, first passed by the Seattle City Council in 2022 and implemented in January 2024, was intended to help Seattle-based couriers earn substantially more than the city’s minimum wage of $19.97. The legislation – primarily advocated for by individuals who no longer serve on the Council – raised couriers’ earnings to $26.40 an hour, guaranteed, before tips. Unfortunately, Grubhub data and news reports show the law has had swift, adverse consequences for the very people it was meant to help.

Grubhub delivery partners are now waiting over 1½ hours between orders

Seattle’s ordinance restricted marketplace platforms’ ability to run their businesses effectively. On Grubhub, this has led to far too many delivery partners being available for the number of orders available. As a result, delivery partners are now waiting an average of 102 minutes between orders, an increase of 437%. 
Chart showing the difference in courier wait times between orders pre- and post-implementation of Seattle's "PayUp" wage ordinance. Two columns, one labeled "Before PayUp" showing wait times under 20 minutes, and a second column labeled "After PayUp" showing wait times over 100 minutes.

Tips are down 26%

When delivery partners are on a delivery, they are getting paid more for the duration of that delivery – but because of Seattleites’ knowledge of delivery partners’ new extreme pay, the increased costs associated with delivering in Seattle, and changes we’ve had to make to our platform in response to the law, tips on those orders have dropped by 26%. This is despite Grubhub keeping tipping in the checkout flow (as opposed to moving it post-delivery.)

Fewer, smaller orders are being placed

PayUp has hurt merchants in Seattle, too, and is disproportionately impacting smaller mom-and-pop restaurants. We are seeing fewer orders being placed overall, and the orders that are being placed are smaller in size. This could be because diners in Seattle feel delivery is no longer an affordable option for them, and even if the law is fixed, it’s possible these customers are gone for good – hurting Seattle businesses in the long term.

It’s not too late to help delivery partners, in Seattle and across the country

While efforts are under way to fix the law, the fallout of PayUp serves as a stark warning to other jurisdictions considering similarly misguided legislation. To be clear, Grubhub supports better pay for delivery partners, but the policy must be written and implemented properly, with all stakeholders at the table. 

Grubhub’s Support for New York City Council Proposal to Update Price Control

At a hearing held by the City Council’s Committee on Consumer and Workforce Protection today, Grubhub stood with independent businesses in support of Int. 0813, which would amend New York City’s permanent price control on third-party delivery apps and give restaurants the flexibility to opt into additional marketing and promotional services should they choose to do so. 

The amendment, which also safeguards access to Grubhub and other platforms at accessible low rates, ensures that small and medium-sized restaurants, especially New York City’s family and immigrant-owned businesses, can choose to pay for additional services that allow them to better compete, reach new customers and thrive. 

“Hundreds of restaurants from across the five boroughs have made it clear they support legislation that would allow them to make their own marketing decisions and better compete with big brands,” said Dave Tovar, senior vice president of communications and government relations at Grubhub. “Our restaurant partners choose to buy services like search engine marketing and optimization, loyalty and rewards programs and more through Grubhub, where they are far less expensive and more effective for reaching diners. We urge the City Council to act with urgency in passing this amendment so that restaurants can either retain their current rates or choose to explore other options that work best for their businesses.” 

More than half of the City Council currently cosponsors the bill. Over five hundred restaurants,  alongside the chambers of commerce from the Bronx, Queens, Brooklyn and Manhattan and dozens of other civic groups, have also voiced their support for this commonsense change. 

Grubhub Applauds New York City Council Passage of “Skip the Stuff” Bill to Cut Plastic Waste

City Council bill, backed by Councilmembers Marjorie Velazquez and Eric Botcher, stands to cut costs for restaurants by making single-use plastics available only upon request 

NEW YORK, Jan. 23, 2023 – Gruhbub today reinforced its support for cutting down on plastic waste by praising the City Council’s passage of “Skip the Stuff,” a bill to prohibit utensils, napkins, condiment packets and containers from being provided with takeout orders from restaurants and delivery services unless specifically requested by the consumer. 

“Grubhub is pleased to see the City Council take action to reduce plastic waste by passing ‘Skip the Stuff,’ which is a win not only for the environment but for local restaurants across New York City. By cutting out extra plastics, restaurants – particularly New York’s small and independent restaurants – now stand to save on operating costs,” said Joshua Bocian, senior manager for government affairs for the east region at Grubhub. “Meanwhile, New York City, already a leader on sustainability initiatives, is making meaningful progress toward curbing the hundreds of millions of tons of plastic used and directed to our waste stream each year.” 

Grubhub previously committed to reduce the number of single-use plastics when it joined the #CutOutCutlery initiative in 2021. Since then, the Grubhub app and website have automatically defaulted to zero utensils and napkins with every order. Diners can still request plasticware when needed.

About Grubhub

Grubhub is part of Just Eat Takeaway.com (LSE: JET, AMS: TKWY), and is a leading U.S. food ordering and delivery marketplace. Dedicated to connecting diners with the food they love from their favorite local restaurants, Grubhub elevates food ordering through innovative restaurant technology, easy-to-use platforms and an improved delivery experience. Grubhub features more than 365,000 restaurant partners in over 4,000 U.S. cities.

Grubhub Partners with RapidSOS to Enhance Driver Safety through Faster & Smarter 911 Response

RapidSOS’s intelligent safety platform integrates with Grubhub for Drivers app, routing accurate data to 911 responders whenever an emergency call is made 

CHICAGO and NEW YORK, Jan. 19, 2023 /PRNewswire/ — Grubhub announced today it is enhancing safety for its delivery partner community by linking into RapidSOS, the intelligent safety platform that routes life-saving data to first responders in an emergency. The partnership will provide Grubhub delivery partners the ability to share dynamic location data as well as caller ID (name, phone number) directly to 911 responders when an emergency call is placed via the Grubhub for Drivers App. The integration is now available in New York City, Boston, Philadelphia and Chicago and will roll out nationwide by mid-2023.

Grubhub and RapidSOS Integration
Grubhub and RapidSOS Integration

With the continuous rise of gig economy jobs, which are expected to make up half of the United States workforce by 2027, Grubhub is focused on expanding its safety features for drivers through partnerships with leading technologies like RapidSOS. For those seeking more flexibility and earning opportunities via Grubhub, the new features will protect delivery partners every step of the way by providing around the clock access to emergency services.

“Grubhub knows that feeling comfortable on the road is a huge component of a positive driving experience, and we are thrilled to partner with RapidSOS to allow our drivers to quickly connect with first responders directly through our app in case of emergency,” said Jeff Smith, director of logistics for Grubhub. “Our delivery partners are essential to thousands of businesses and communities, which is why we are constantly innovating to offer the latest safety features and technology.”

“Grubhub is a leader in take-out and food delivery, providing an essential service for communities and opportunities for individuals,” said Karin Marquez, Chief Public Safety Brand Officer, RapidSOS. “With safety becoming an important feature across technology products and apps, we applaud Grubhub for being proactive in bringing a direct link to 911 for its delivery partners with actionable data that enables faster and smarter emergency response.”

Linking Delivery Partners to Safety

Serving millions of diners with hundreds of thousands of orders daily, Grubhub’s delivery partners are essential to their local businesses and communities. Through its Driver Safety Council, Grubhub holds regular discussions with active Grubhub delivery partners on how to ensure each feels safe while delivering orders. Direct input helps the company continuously improve while connecting drivers to safety gear, tutorials, and in-app navigation for those using bikes to make deliveries.

In collaboration with RapidSOS, the Grubhub for Drivers App will now digitally route critical data to the nearest 911 center. It does so via three new features that are accessible to delivery partners when they hit the SOS Button in the Safety Services section: 911 Slider, Safety Agent Call, and Safety Agent Text. With just one tap, Grubhub Delivery Partners are connected to emergency assistance by voice or text message.

The 911 slider feature allows a delivery partner to simply swipe within the app to immediately connect with 911. The Safety Agent Call or Text feature links a delivery partner to a RapidSOS agent, who can walk them through an uncomfortable situation and pass along real-time location data along with name and phone number to first responders if needed.

For more information about the partnership and Grubhub’s commitment to delivery partner safety, please visit https://driver.grubhub.com/driver-safety/.

About RapidSOS, Inc.

In partnership with public safety, RapidSOS has created the world’s first intelligent safety platform that securely links life-saving data from over 500 million connected devices, apps and sensors directly to safety agents, 911 and first responders. To learn more about our technology that’s creating life-saving connections, visit www.rapidsos.com.

About Grubhub

Grubhub is part of Just Eat Takeaway.com (LSE: JET, AMS: TKWY), and is a leading U.S. food ordering and delivery marketplace. Dedicated to connecting diners with the food they love from their favorite local restaurants, Grubhub elevates food ordering through innovative restaurant technology, easy-to-use platforms and an improved delivery experience. Grubhub features more than 365,000 restaurant partners in over 4,000 U.S. cities.

Grubhub Applauds Congressional Passage of Food Donation Improvement Act (FDIA) as Pivotal in Fight Against Food Insecurity

FDIA clarifies existing food donation laws, making it easier for restaurants & businesses to fight waste and give excess food directly to those in need 

WASHINGTON –  Following years of advocacy on the Hill, Grubhub today praised Congress for passing the Food Donation Improvement Act (FDIA), which strengthens existing laws for food donations, helps prevent food waste and opens the door for  relief to be provided directly to the millions of Americans who are experiencing food insecurity. The legislation builds upon the codified Bill Emerson Good Samaritan Food Donation Act by expanding and clarifying liability protections so that companies can directly donate safe quality foods without litigation fears. 

“The Food Donation Improvement Act will bring all businesses, ranging from large corporations to small and independent restaurants, into the fight against food insecurity,” said Amy Healy, vice president of government affairs at Grubhub. “With billions of dollars of food going to waste each year – even with hunger on the rise – it’s well past time to clarify America’s laws around food donation. We applaud our partners in government on both sides of the aisle for sending this essential legislation to President Biden’s desk.” 

As part of its effort to diminish food insecurity, Grubhub has been a vocal supporter of the Food Donation Improvement Act, meeting with more than 50 Congressional offices on both sides of the aisle to build support and garner cosponsors. The company joined Members of Congress and other corporate partners including WW and the Harvard Law School Food Law and Policy Clinic on the Hill this summer for educational briefings and advocacy training and was among the three original signers of an open letter calling on Congress to pass the FDIA. 

About Grubhub 

Grubhub is part of Just Eat Takeaway.com (LSE: JET, AMS: TKWY), and is a leading U.S. food ordering and delivery marketplace. Dedicated to connecting diners with the food they love from their favorite local restaurants, Grubhub elevates food ordering through innovative restaurant technology, easy-to-use platforms and an improved delivery experience. Grubhub features more than 365,000 restaurant partners in over 4,000 U.S. cities.

Our Commitment to Transparency

Originally posted on 11/21/2022 and updated on 12/30/22 to reflect agreement with D.C. Attorney General Karl Racine 

Grubhub’s mission is to help restaurants grow. That’s why since our founding in Chicago nearly twenty years ago, we’ve consistently evolved to provide restaurants with the best possible tools and experience, and to provide transparency to the diners and communities that rely on our platform. 

We are pleased to announce that most recently in the state of Pennsylvania and in Washington, D.C., we’ve agreed with Attorneys General Josh Shapiro and Karl Racine to provide additional clarity for our diners and thousands of restaurant partners. Grubhub has agreed to take a number of steps, including: 

  • Offering enhanced menu price disclosures, explaining that prices for menu items may be lower in store. 
  • Identifying non-partnered restaurants, so that diners know that these restaurants do not have contracts with Grubhub.
  • Shutting down or transferring ownership of existing microsites, created to help restaurants strengthen their online presence and digital brand, depending on a restaurant’s preference. 
  • Providing more clarity around the Grubhub Guarantee to help diners understand that it helps ensure timely delivery and competitive prices. 

As always, Grubhub offers a variety of negotiable pricing packages to fit every restaurant’s needs. Through our “Plus” and “Premium” packages, restaurants can access marketing tools such as promotions and commission-free ordering with Direct to target both new and existing customers.

We continue to spend millions of dollars in marketing annually to generate orders for our partners and boost support, visibility and order volume, and we are committed to evolving alongside the restaurant industry. 

Why Price Controls Are Bad For Restaurants

Originally Posted on 07/16/2021
Updated on 8/24/2022 to include data showing depressed growth for restaurants impacted by price controls

Grubhub was founded in Chicago in 2004 to help restaurants grow. Since then, we have worked hard to build a business that generates more orders for restaurants at a low cost to them, helping make even the smallest independent restaurant competitive with much larger establishments that have enormous marketing budgets.

While the general idea behind price controls is that they enable restaurants to access delivery, marketing and other services at artificially low prices, the actual impact is far different. Price controls create strict limits on what local restaurants can do to promote their business, find new diners, engage regular customers and send more orders out their doors.

That is why we continue to fight price controls in court. We complied with them during the pandemic, effectively conveying hundreds of millions of dollars to restaurants as they were forced to close their doors to dine-in customers. Now, many cities, including Philadelphia, Seattle and Minneapolis, are shifting toward reasonable compromises: in San Francisco, we recently withdrew our litigation after the city passed an amendment to its cap allowing restaurants to opt into rates higher than 15 percent if they chose additional services. Unfortunately, others – including New York City – have so far let strict permanent caps remain in place.

Understanding How Grubhub Helps Restaurants Grow 

Grubhub provides delivery services to restaurants that opt to use them, but the heart of Grubhub’s business — and the value we bring to restaurants — is the marketing support and visibility we provide to increase orders for restaurants. And that is how our fees are structured — to give restaurant partners options so they can find what works best for their particular business.

  • Restaurant partners that use Grubhub Direct or our Direct Order Toolkit products have powerful tools to grow their businesses without any marketing fees.
  • Restaurant partners that opt to use the Grubhub Marketplace to generate orders from our network of 32 million diners select a negotiable marketing package that generally ranges from 5 to 15 percent per order based on the level of marketing and support that makes sense for their business.
  • Restaurant partners that choose to use Grubhub’s drivers (vs. their own, in-house delivery staff) to complete orders pay Grubhub a market standard delivery fee.

We spend hundreds of millions of dollars in marketing annually to generate orders for our restaurant partners. In fact, in New York City prior to the pandemic, thousands of restaurant partners opted into some of these services that offered them more marketing options—with many of them opting to pay Grubhub more than 15 percent of the order price. When all of the costs and expenses of running our business are accounted for, we make approximately 1 percent of total food sales as profit — and that was before temporary price controls significantly impacted our ability to operate a profitable business.

The services Grubhub provides are akin to what companies like Google offer to promote small businesses. Or at a more basic level, we are similar to a company that sells billboard space to the local hardware store. Grubhub gives independent restaurants access to promotional ability that was previously unavailable to them because of the expertise and scale required.

Permanent price controls eliminate our ability to offer many of these services to restaurants, because the cost to our business would become too high. 

Restaurants Impacted by Price Controls Are Getting Left Behind 

In June 2021, one year after New York City first implemented a cap on commissions for third-party delivery apps, Grubhub’s data showed that restaurants impacted by that policy were not participating in the city’s post-pandemic economic recovery at the same rate as other businesses.

In fact, restaurants impacted by the cap – in other words, those whose contracted rates with Grubhub were adjusted down in order to adhere to the new regulation – saw their order volumes grow at just 6 percent over that year. Meanwhile, restaurants not impacted by the price control, or those whose contracted rates were already at or below the 15 percent threshold, saw their orders grow nearly 75 percent faster, at a rate of almost 80 percent. 

While surely an unintended consequence of its legislation, the New York City Council’s choice to make price controls permanent has hurt the very restaurants, including small and family-owned restaurants, that it intended to protect. That’s because independent restaurants, unlike large chain restaurants which have their own resources, often rely on platforms like Grubhub for marketing and promotions. Price controls have limited the accessibility of those services. 

The effects of the price control trickled down to hurt both Grubhub’s drivers and restaurants’ own drivers, as well. While tips for restaurants and drivers grew by nearly 60 percent between June 2020 and 2021, restaurants that were impacted by the cap and drivers who deliver from these restaurants saw no significant growth in tips, likely because orders to those restaurants grew just slightly. 

Ultimately, price controls are exactly the wrong thing to do when restaurants need more support, visibility and order volume than ever. Grubhub serves restaurants, and we will always stand up for them and work hard to protect their ability to grow and thrive.