UPDATE: April 24, 2020: Andrew Ding, co-owner of New York City restaurant Expat, a Southeast Asian gastropub, claims that Grubhub charged it $380 in commission fees on 54 phone calls it received via Grubhub between January 4 and April 20, even though only three of the calls resulted in orders, Eater reports. Expat claims that less than $21 of those charges were on calls that resulted in revenue.
"Grubhub’s goal is to get orders right — regardless of whether they are placed online, on our app, or via phone – while keeping the process fast and easy for restaurants and diners. This didn’t happen in this case. We are conducting an immediate audit of Expat's phone charges to fix the problem, and our restaurant support team will be reaching out to Mr. Ding shortly," a Grubhub spokesperson told Restaurant Dive in an emailed statement.
- Grubhub/Seamless revised its phone service for diners using it to contact the restaurant nationwide. Diners will be prompted to press #1 to place an order or #2 for everything else, according to a letter Grubhub sent to the New York City Council obtained by Restaurant Dive. The letter was sent following Grubhub's formation of a task force in November, which included product, technical and restaurant partnership teams, to address concerns over restaurants being charged for diners using its service to contact a restaurant even though an order was not placed.
- The company is nearly doubling its account advisors on its restaurant success team. These account advisors can assist restaurants with phone order inquiries and are also available to provide strategies to grow order volume and drive revenue.
- Restaurant partners will still be able to listen to each billed phone order, oftentimes within minutes of the call, and will have four months to dispute a phone order commission. The company said it will continue to conduct regular roundtables in New York and elsewhere.
Grubhub's phone policy changes followed New York City Council's threats that it would consider legislation if the company didn't address complaints over how it handled phone orders. In November, it extended its look-back period for restaurants to review phone orders from 60 to 120 days.
But the city council has increased its scrutiny over delivery providers overall, and it's becoming clear that the council's criticism is helping revise company policies nationwide. City Councilmember Ritchie Torres introduced legislation making delivery providers explain how much of customer tips actually go to drivers. This proposal appears to be targeting DoorDash’s tipping practices, which were revised late last year following criticism of its policy that made it appear that entire tips weren’t going to drivers.
New York City also proposed a 10% commission fee cap on third-party delivery platforms in February. The proposition is part of a series of bills intended to reduce third-party delivery power, with other proposed legislation targeting food tampering in delivery transit, phone call fees and third-party limits on delivery menu prices of their partner restaurants.
Even though Grubhub's revisions and open dialogue will make it easier for restaurants to dispute phone order charges and provide additional feedback, some New York City officials are not satisfied. New York City Councilmember Mark Gjonaj told Nation's Restaurant News that the reforms were "insufficient" since they don't address restaurants that already paid for phone order fees charged in error.
Grubhub has good reason to ease tensions among restaurant providers and regulators. Its market share fell last year to 22%, with DoorDash and Uber Eats gaining ground as the top two players. It's also under scrutiny from investors following its Q3 2019 earning release where CEO Matt Maloney said it would have to revise the company’s policy of posting non-partnered restaurants on its platform and bolster its loyalty rewards program to rebuild market share. Still, its latest moves reveal that it is willing to make its model work for all, and the company is positioned to benefit from the novel coronavirus crisis thanks to municipal orders that restaurants offer carryout and delivery only. Grubhub added over four times as many restaurants to its platform during a single day in March than it had on its previous record day.