Industry news

Alright, Seriously—WTF, Grubhub?

by David Klemt

Or, more to the point, stop working with “partners” who exploit our industry rather than support it.

In spectacular and entirely predictable fashion, Grubhub’s “free lunch” further reveals that third-party delivery platforms don’t care about restaurants.

Of course, they all say they support restaurant owners and operators. And, of course, they’re quick to pat themselves on their backs for being a pandemic lifeline.

But…no. Time and time again, mainly through their exorbitant and exploitative fees, they prove the opposite is true.

Restaurants and bars aren’t third-party delivery partners. Rather, these relationships are adversarial and detrimental. So much so, in fact, that some states passed laws to limit third-party delivery fees.

In Nevada, for example, Clark County Commissioners passed an emergency ordinance in August 2020 capping those fees at 15 percent. Clearly, we need to stop enriching companies that prove they don’t support the hospitality industry but cause it significant harm.

Free Lunch?

They say there’s no such thing as a free lunch. Apparently, Grubhub really wants to prove that maxim true.

That’s one of the takeaways from their disastrous promotion. Last Tuesday, in what’s being reported as an attempt to claim the delivery throne in New York City, Grubhub offered “free” lunch to anyone who placed an order for delivery.

The requirements for this promotion? Place an order for delivery through Grubhub on May 17 between 11:00 AM and 2:00 PM and use the code “freelunch.”

Of course, customer orders weren’t entirely free. Rather, the code was good for a $15 discount. Still, a wildly attractive offer as the ensuing debacle reveals.

Unsurprisingly, the promotion made for some eye-grabbing and eye-rolling headlines. Buzzfeed News published the most attention-grabbing one: “GrubHub Was Getting 6000 Orders A Minute During Its Promo Today That Left Restaurant Workers Stressed And Customers Hangry.”

Six thousand orders per minute during a promotion with a three-hour window in a single market.

In addition, the outlet reported that one unsatisfied customer was number 3,630 in the Grubhub customer service queue. Apparently—and who can blame him—he hung up before he could speak with a Grubhub rep about his missing order.

Duh

Who could’ve seen this coming? Any of the restaurant owners, operators, or team members Grubhub “serves,” that’s who.

In fact, anyone who works in this industry with on-premise experience knew this was going to happen. So, too, any journalist who specializes in hospitality.

The fact that whoever came up with this promotion didn’t see this coming is revealing. Unless the creators of these apps and services have real-world restaurant experience, they don’t understand the business.

How can one effectively and properly serve an industry without an understanding of how it operates? Hospitality is about service. Shouldn’t the companies attempting to work within our industry work hard to serve alongside us?

Let’s be clear—this promotion was in no way designed to help struggling restaurants. It wasn’t intended to boost their traffic and revenue. Rather, it was solely created to serve Grubhub’s desire to be number one.

As we all know, we’re experiencing major staff shortages. There are also supply shortages making it difficult for operators to obtain product reliably. Grubhub made those problems exponentially worse.

Some restaurants stopped taking delivery orders. Others canceled orders. There were operators who closed in an effort to catch up with orders and prevent the situation from worsening.

According to news stories, some social media users posted that they planned to stop ordering through third-party platforms.

Negative Impact

If you’re new to KRG Hospitality, welcome. You’re likely realizing that we’re not fans of third-party delivery.

Those of you who are familiar with us have known for quite some time that we support direct delivery. That is, delivery controlled and executed by the restaurant itself.

It’s not that we’re against innovation. Rather, our dislike of these platforms, generally speaking, comes from our perception of their behavior.

In our opinion, they take control away from operators and cost them money. Again, speaking generally, they collect customer data that operators should control. Their fees are ridiculous in most cases. And when it comes to the customer experience, their inconsistencies and shortcomings reflect poorly on the operators far too often.

Studies show that customers who have issues with third-party deliveries often place the blame on the restaurant. Food the wrong temperature? Order arrive late? Packages in less-than-ideal condition? While those issues and others can be the fault of the driver, the restaurant often takes the brunt of a customer’s dissatisfaction.

Of course, there’s also the financial impact of third-party delivery on restaurants. A SevenRooms report from last year reveals how these platforms harm operators and their bottom lines.

The Solution

Look, we know operators have a ton on their plates. But protecting and boosting the bottom line is a non-negotiable element of this business.

Yes, it’ll take some time, effort, and money to set up direct delivery. However, it’s the best solution.

Direct delivery means the operator collects and control valuable data. Likewise, the operator can ensure consistency. Through direct delivery, the operator shapes and controls the experience.

Control. Inherently, third-party delivery takes some control away from operators. That’s not a good thing, and neither is their financial impact.

Look into setting up direct delivery, take control, and protect your revenue ASAP. Friend of KRG “Rev” Ciancio and SevenRooms CEO Joel Montaniel each address delivery on the Bar Hacks podcast. Listen to episode 13 with Rev and episode 24 with Joel to learn more about delivery.

We need to stop rewarding companies that exploit our industry and take advantage of our owners, operators, and hard-working staff members.

Direct delivery is the answer. Take steps to implement it today.

Image: Rosie Kerr on Unsplash