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I’m confused. How is GrubHub getting a 30% commission out of restaurants that don’t actively partner with them?

by cleak 6y ago

nirushiv 6y ago
I think they mean that other partnered restaurants get 30%. I could be misreading it though.
CydeWeys 6y ago
They inflate menu prices and add additional service and delivery fees. You end up spending $50 on a meal that should be $30, and if you were shopping by amount of money spent (as many people are) then the net result is $30 going to the restaurant instead of all $50 you were willing to spend.
- cleak 6y ago
  Sure, but that’s not actually a commission from the restaurant. The restaurant earns the same amount regardless of if it was true takeout or GrubHub (for folks that haven’t opted in to being partners).
- listenallyall 6y ago
  sorry but at some point it's on the customer. if they are so price-insensitive that they are willing to pay $50 for $30 of food, they are too lazy to cross-reference the price, or shop around, or just go pick it up themselves, then I have no issue with the delivery service milking them for whatever the customer is willing to spend.
jiofih 6y ago
They only do this ruse for a while, then after controlling a good chunk of the business they “sell” their services officially to the restaurant, including commission. It’s not a charity.
- cleak 6y ago
  But it's up to the individual restaurants to agree to this. There's no automatic 30% commission. If a delivery company wants to burn their capital offering discounts, why stop them? The restaurant is under no obligation to sign a contract taking on the burden of kreping those discounts.
  - jiofih 6y ago
    Very naive view. They will be “strongly incentivized” to sign once the company can threaten to pull their listing off and vanish 50% of their customer base. Nothing new here, standard growth playbook.
    - splaytreemap 6y ago
      So then why would California force them into that very situation?
MaintenanceMode 6y ago
It's not just about the money. The menus, information, and other details are just wrong or go out-of-date because this pizza restaurant changes things on a daily basis. Additionally their business is not setup for take-out at scale. They do the occasional take-out but when the phone starts ringing with to-go orders they were not anticipating, they are not staffed or ready to meet the demand. They call to remove themselves and then a few weeks later they end up back on there.

I’m confused. How is GrubHub getting a 30% commission out of restaurants that don’t actively partner with them?

by cleak 6y ago

I’m confused. How is GrubHub getting a 30% commission out of restaurants that don’t actively partner with them?

nirushiv 6y ago

I think they mean that other partnered restaurants get 30%. I could be misreading it though.

CydeWeys 6y ago

They inflate menu prices and add additional service and delivery fees. You end up spending $50 on a meal that should be $30, and if you were shopping by amount of money spent (as many people are) then the net result is $30 going to the restaurant instead of all $50 you were willing to spend.

cleak 6y ago
Sure, but that’s not actually a commission from the restaurant. The restaurant earns the same amount regardless of if it was true takeout or GrubHub (for folks that haven’t opted in to being partners).
listenallyall 6y ago
sorry but at some point it's on the customer. if they are so price-insensitive that they are willing to pay $50 for $30 of food, they are too lazy to cross-reference the price, or shop around, or just go pick it up themselves, then I have no issue with the delivery service milking them for whatever the customer is willing to spend.

jiofih 6y ago

They only do this ruse for a while, then after controlling a good chunk of the business they “sell” their services officially to the restaurant, including commission. It’s not a charity.

cleak 6y ago
But it's up to the individual restaurants to agree to this. There's no automatic 30% commission. If a delivery company wants to burn their capital offering discounts, why stop them? The restaurant is under no obligation to sign a contract taking on the burden of kreping those discounts.
- jiofih 6y ago
  Very naive view. They will be “strongly incentivized” to sign once the company can threaten to pull their listing off and vanish 50% of their customer base. Nothing new here, standard growth playbook.
  - splaytreemap 6y ago
    So then why would California force them into that very situation?

MaintenanceMode 6y ago

It's not just about the money. The menus, information, and other details are just wrong or go out-of-date because this pizza restaurant changes things on a daily basis. Additionally their business is not setup for take-out at scale. They do the occasional take-out but when the phone starts ringing with to-go orders they were not anticipating, they are not staffed or ready to meet the demand. They call to remove themselves and then a few weeks later they end up back on there.