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Just Eat Is Selling Grubhub to Marc Lore's Wonder for $650M
- dexwiz 2y agoWhy did Grubhub lose to DoorDash and Uber Eats? DoorDash's market cap is almost 100x this deal, and Uber is twice that.
- SOLAR_FIELDS 2y agoWhat follows is anecdotal conjecture: Grubhub has not really evolved much beyond the same core business model they have had for the past decade. The other companies are doing all sorts of partnerships, rewards, referrals, gamification of algorithms etc. Grubhub stagnated while these companies innovated
- dartos 2y agoMaybe I’m cynical, but “innovated” and implementing classic growth and marketing tactics aren’t the same.
- conductr 2y agoI tend to agree. I would say they were just outcompeted rather than lost an innovation battle.
- the_sleaze_ 2y agoAnother armchair opinion: "GrubHub" has negative connotations in a food service situation where you're already so far removed from being able to grade how skeevy a kitchen is. Cheap chinese takeout from UberEats sounds cleaner than from Grub Hub...
- duxup 2y agoI agree. I think a lot of the growing pains of that industry were attached to GrubHub's name. Possibly fairly, but it still is a bit of a net negative image wise.
- xnx 2y agoWait until you hear about my food delivery marketplace called SlopSpot.
- misnome 2y agoAnd it's special discounting feature where it is cheaper if you realise you didn't order enough food: SloppySeconds
- datadrivenangel 2y agoAgreed. I spoke with a small restaurant owner last night (he was delivering catering for a corporate event), and he mentioned in passing that GrubHub was the only platform he wasn't on because of how aggressive and exploitative they were in terms of fees.
- Sohcahtoa82 2y ago> The other companies are doing all sorts of partnerships [..] GrubHub partnered with Amazon. Amazon Prime now includes a GrubHub+ account. I have Prime, but have yet to use GH+, but that's more because I just stopped getting food delivered in general. Not because of the price (I used DD and had the DashPass which is very much worth it if you get at least 2 deliveries/month), but because I started getting deliveries with missing items. When that happens, they won't offer to do another delivery, they'll just either refund the item or I can go pick it up. Both options defeat the purpose of ordering delivery. I either don't get my food, or I have to leave the house.
- itslennysfault 2y agoGrubHub was always my go to. That miiight be just because I lived in Chicago when it launched so it was the default for me for so long. I used it pretty much exclusively all through Covid lockdown, but have since stopped doing delivery much. Maybe once or twice a month. I do not have Prime (so I don't have GH+), but my credit card provides "free" DashPass so I now pretty much exclusively use Door Dash when I do get food delivered. If it wasn't for the free DashPass I'd probably still use Grub Hub
- lumost 2y agoThere are two factors at work in my opinion. Doordash prioritized selection, they did online ordering even when restaurants didn't want it. Eventually the demand was high enough that restaurants adapted. Grubhub focused on the traditional take out restaurants. Doordash also mixed in multi-delivery to handle mixed alcohol/food purchases. Beyond this, tech always follows a power law distribution in returns. Doordash is the number one player, and as such will be about 10x bigger than the next runner up. How much of this is network effects/first preference vs. manufactured return is anyones guess, but most people do not want to spend time price matching doordash/grubhub on orders - so whoever has the bigger network/more customers will get the most folks.
- vile_wretch 2y agoDoorDash and Uber Eats also operate internationally and have a single cohesive brand whereas each country seems to have its own Just Eat-owned service as a result of acquisitions: JustEat in the UK, GrubHub in the US, SkipTheDishes in Canada and Menulog in Australia. All with the same branding and logo but different names and with distinct mobile applications.
- aetherson 2y agoDoes that matter very much? How much of DoorDash's revenue can possibly come from international travelers who want to use the same app they always do?
- tptacek 2y agoDo DoorDash and Grubhub have the same business model? DoorDash handles logistics end-to-end; as I recall (it's been a long time since I've used Grubhub), they at one point did not, but were instead just a market front-end to a variety of different delivery services.
- lotsofpulp 2y agoEnd to end logistics would be employing the drivers and owning and maintaining the cars used to pick up and deliver.
- tptacek 2y agoWhatever term you want to use, at least at one point my understanding was that Grubhub didn't actually handle the deliveries. I have no idea if this remains true and I'm not suggesting this is why Grubhub failed; I'm asking.
- lotsofpulp 2y agoI have never used any of these delivery websites, but I assumed grubhub was fungible with Ubereats/Doordash/Instacart. All of them being websites that pay independent contractors to pickup and deliver things. https://careers.grubhub.com/drivers https://careers.grubhub.com/drivers
- itslennysfault 2y agoMaybe this was different per region, but I used GrubHub when it first launched in Chicago and even back then they had "their own drivers" (contractors same as Uber/DoorDash). However, I wouldn't be surprised if their roll out involved capturing businesses that already offered delivery drivers until they had a critical mass of drivers in the region or something.
- tptacek 2y agoI could 100% just be wrong about this!
- bangaroo 2y agohaving worked at grubhub and spent a fair amount of time in discussion with ceo/founder matt maloney: - the leadership during the peak of competition for mindshare in the space was exceptionally weak and overconfident. the grubhub/seamless merger led to a completely split company culture between NY and chicago. - when they were on top, they were a shitty company with scummy practices (even for the space) that made restaurants very skeptical of them specifically. grubhub effectively ran like a protection racket. they bought up tons of "menu pages" websites and restaurant listing sites and launched fake websites to overtake the online presence of grubhub restaurants (including replacing their phone numbers in google summaries with voip numbers, calls through which restaurants were billed an "order origination" premium for.) they broadly resisted the desire of their restaurants to share ownership of their customers (or even be able to determine who their customers were.) - they completely lacked the ability to plan long-term or even guess the consequences of any action they would take and would do things like "suddenly, without warning restaurants, offer a 50% off deal on lunch all across new york city," leading to huge numbers of canceled and delayed orders and further eroding their public perception. - they were already public by the time that uber eats, doordash, and postmates were really aggressively entering the food delivery space and thus had to grow and ship with realistic constraints instead of burning investor money to disrupt in hopes that they would be profitable. probably a million more reasons beyond that, but just off the top of my head a few ways the ball was dropped/the deck was stacked against them.
- dexwiz 2y agoThank you, this is about the only actually insightful answer in the thread.
- purple_ferret 2y agoI think Doordash realized people in middle America would pay to get Taco Bell and McDonald's delivered while Grubhub never really moved out of big cities.
- dgrin91 2y agoBought for $7B in '21 and sold at a 90% loss now? Wtf happened? How could a food delivery service do so poorly during COVID years? I hadn't heard of troubles at GrubHub before and I now plenty of folks who use it
- anotherhue 2y agoThis is British empire levels of value destruction.
- ruddct 2y ago* Take a low margin, fragmented industry littered with failed businesses * Then take some cheap but kind of profitable behavior in that industry (take local delivery over phone, send your lowest paid kitchen staffer to run it) * Then layer on some of the most expensive labor on the planet (devs, PMs, tech company workers) to build a replacement for that behavior * Then treat your lowest paid workers poorly, attracting regulatory scrutiny
- xnx 2y ago> Wtf happened? Equally valid to ask why it was so overvalued 3 years ago.
- jhatax 2y agoCould ask the same question about $PTON. As another commentator said, “British empire levels of value destruction”.
- SoftTalker 2y agoFood delivery is for people with disposable income or who just don't think about where they are spending money. Disposable income has been in short supply for a lot of people lately. I have never once ordered from GrubHub, Doordash, or UberEats. Even during COVID. I don't understand paying a premium to receive cold, soggy food an hour or two later. In that time I can prepare an actually good meal with better ingredients, eat it while it's still hot, and clean up. For probably half the cost.
- buggeryorkshire 2y agoWorked for JET at the time of this acquisition, everybody I talked to at work about this thought the acquisition was nuts.
- anotherhue 2y agoHello from Guardians.
- buggeryorkshire 2y agoHa! Hello, indeed.
- chrnola 2y agoMiss you all dearly.
- bluehatbrit 2y agoExactly my memory as well, even the upper-middle leaders seemed thoroughly confused by it.
- buggeryorkshire 2y agoYeah. It was that time iirc when all similar companies were trying to get market share whilst their sales went through the roof due to lockdown. I wonder whether the project started a couple of years ago to consolidate the systems of all the acquisitions has actually borne fruit?
- bluehatbrit 2y agoI recently caught up with a few people I used to work with who are still there. From what I gather, the consolidation is still happening and not moving very quickly. Lots of internal politics, people not wanting to lose their areas, etc. I'd guess that's partly why they've also just done some more layoffs, but thats just a guess.
- add-sub-mul-div 2y agoHow are any of these businesses thriving? The price of restaurant food has gotten ridiculous on its own, even without the middleman. Add the markup on these platforms, then the delivery charges etc. How and why are so many people who aren't financially secure throwing their money away on something so unnecessary?
- karaterobot 2y agoEnough people have the money and don't cook, I guess. I know people who say they did not turn on their ovens the entire term of their lease. I think it's probably a bad way to move through life, but that's only my opinion.
- duxup 2y agoI'm going to hope to avoid a generational bickering fest here but I'm going to note that I notice what I think of as strange default consumer behavior even in my own office.... The younger folks getting lunch delivered every day, they got new cars and not just new the better packages on those cars, their apartments have all sorts of amenities, great locations. I'm the "old guy" not just because of age but because I made my own sandwich and brought lunch. It's like all this is the default for them, they don't seem to notice. They're 100% not wrong that opportunities are different compared to when I was their age, but at the same time, when I was their age I lived in a crappy apartment, drove a 15 year old basic car. My idea of going out was to some cheap place for dinner and paying for nosebleed seats on a weekday at the ballpark... these guys show up at the same fancy places I do / didn't eat at until much later in life. I don't say this to ridicule them, but it seems like their concept of just sort of default consumerism is pretty heavy on the consuming.
- diab0lic 2y agoSimilar experience. I’m in my 30s and many peers in the same age group (add a standard deviation in each direction, but skew to the left) “don’t know how to cook” and door dash daily, sometimes dessert is a separate order made later. When I mention that it sounds wildly expensive it doesn’t even register. There’s a pretty large gap in the assumed baseline between people who don’t use these services and people who rely on them.
- lifeisstillgood 2y agoSo with my poor laypersons understanding of MMT, governments print money to direct a nations resources where they want (ie if govt pays for nurses they are out competing the private sectors use of same person for say food delivery). But if they don’t tax that money away then inflation occurs. They cannot tax the nurse 100% (!) so the money goes up the wealth chain (to nurses landlord and electric utilities owners). And then it gets invested in things like grub hub Now the govt could tax the wealthy - but they don’t for reaosns (usually to do with campaign finance but also other less corrupt reasons) But here grubhub just set fire to 5.5Bn dollars. Which from MMT pov is exactly the same as taxing it And now the govt can print 5.5bn new dollars and spend it on nurses … with in theory net zero inflation effect And that ladies and gentlemen is how MMT looks like Keynesianism with a new coat of paint And is also why wealth taxes - which there is a fair bit of resistance to - is more or less the same as some horrific stock market crash - just the taxes are more controlled and more targeted And why bonds are the compromise candidate in that debate as well ! Edit: so on bonds - if inflation is at 10% as was recently then offering 100bn of 20 year treasuries at 1% is taking 100bn out of the market or removing 9% of inflation pressure for the cost of 1% pa. It does mean that when the bond market that every government is afraid of starts charging 7% then governments response really should be - ok that’s too expensive a means of reducing inflation - we are going to tax the wealthy instead. Which is why I find it weird most governments have been persuaded to tie one hand behind their backs …
- alberth 2y agoYou're overcomplicating it. It's just Capitalism. Someone made a $5B bet and it didn't payoff. It's nothing more than that.
- sdwr 2y agoHang on, it's only the same if Just Eat bought GrubHub from the government. Otherwise, the $5.5B isn't removed from circulation, it's in the hands of the previous owners of GrubHub
- lifeisstillgood 2y agoHmmm, my dreams of the Nobel in economics goes up in smoke. I think it depends on how just eat financed it. If they borrowed 6bn from a bank, then the bank created 6bn from thin air, and will more or less have to write that off as just eat won’t pay it back. So the net balance will be .. err 6bn created and given to just eat: bank assets 6bn, just eat liability 6bn - total new cash in world is 6bn. Just eat hands 6B to lucky founder, in return for a website and domain name. Aha - the bank is the creator of the money - they magic it into existence - now if lucky founder deposits it into same bank, they have a liability of 6bn to him, and previously had a asset of 6bn of loans. Net zero. But now they have to write off the 6bn asset, so they are negative 6bn. So total money across the economy is down 6bn This also - I think - works if just eat raised it from VCs who got it from investors - someone at some point loaned money to someone or is obliged to pay it back. This shit is harder than it looks on Steve keens podcast
- throw4847285 2y agoThis feels backwards. Wonder basically only exists in the NY metro area, and their coverage is still spotty because it's tied to specific storefronts. They sell pretty OK bowls and pizza, and their main advantage seems to be excellent branding. What's the value prop here? Grubhub may be crappy, but it works and it works globally.
- bsimpson 2y agoAccording to the article, they also own Blue Apron. Feels like they might be buying clout in the industry by buying business that already exist in it.
- CSMastermind 2y agoFunny because Grubhub themselves went on a buying spree about 12 years ago purchasing tons of independent food delivery apps to gain marketshare.
- throw4847285 2y agoYeah, I remember when they bought Seamless.
- bsimpson 2y agoIt's funny, because as someone who never got into delivery apps, they all blur together in my mind (complete with the constant choice of an orange color palette from a myriad of different companies).
- ChrisArchitect 2y agoOfficial release: https://about.grubhub.com/news/wonder-announces-acquisition-of-grubhub/ https://about.grubhub.com/news/wonder-announces-acquisition-...