Grubhub Will Let Restaurants Circumvent Marketing Fees with Direct Links
Food delivery apps can provide an array of benefits to restaurants: not just a place for customers to place orders and delivery drivers to bring that food to their door, but also exposure and advertising to drum up business in the first place. But companies like DoorDash, Grubhub, and Uber Eats also charge for all these services—and take a chunk of revenue in the process. For restaurants, these fees add up—sometimes frustratingly—and so recently, delivery services appear to be appealing to restaurants through a "less is more" approach.
Last week, DoorDash announced it would officially allow partners to use their own delivery staff at lower commissions. And this week, Grubhub has rolled out new marketing tools intended to help restaurants circumvent some of Grubhub’s own fees.
“As restaurants face uncertain and challenging times this winter, Grubhub is introducing a new package of marketing commission-free solutions to make it easier for restaurants to do online ordering through their own digital channels or on-premise properties,” Grubhub explained in the announcement. They continued that restaurants will still be charged “an order processing fee, which the restaurant would face regardless for credit card processing, and a delivery fee if the restaurant wants to use our drivers for delivery.”
“Even though we may fulfill the order and be the back-end technology, because we’re not providing the marketing service there, we’re not taking a commission,” Seth Priebatsch, Grubhub’s chief revenue officer, further clarified to CNBC.
Specifically, Grubhub will now provide restaurants with a “Direct Order Toolkit” which are Grubhub-approved, fee-free links to the restaurant’s Grubhub page. Options include an ordering link for things like emails and social media, an “Order Now” button for websites, and a QR code for printed materials like flyers or signs. Other routes to restaurant pages, like finding the restaurant via the Grubhub app or website, would still incur marketing fees.
“It’s never been more important than right now for Grubhub to find and develop ways for our independent restaurant partners to serve their customers and drive online orders,” Priebatsch stated in a nod to the increase in online ordering caused by the COVID-19 pandemic. “The Direct Order Toolkit delivers on that commitment.”
And yet, in the past, Grubhub has actually faced accusations of doing the exact opposite: tacitly trying to route customers through Grubhub’s own websites or phone lines to collect more fees. Grubhub has previously promised to address these allegations, but any new tools would seem to serve as a further goodwill gesture.
That said, it’s also worth noting that between Grubhub being bought by the Dutch delivery company Just Eat Takeaway and DoorDash launching its IPO today, the battle for partners in the delivery game is still extremely competitive—so appeasing restaurants likely offers benefits to Grubhub, as well.