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Grubhub's New Strategy Is to Be an Even Worse Partner to Restaurants

It wants to "expand its restaurant network without officially partnering with eateries," which is to say without the restaurants' permission

The food delivery website and app Grubhub has been getting on restaurateurs' nerves for a while. In a class action lawsuit filed in January, multiple restaurants alleged that the site was sneakily charging restaurants for phone calls that weren't orders, since the calls were placed through proxy phone numbers Grubhub set up. In July, New Food Economy reported that Grubhub was buying restaurant web domains without restaurants' knowledge or consent, and though Grubhub argued it's technically allowed to do that in the contract, it was still a bad look. So what is the company doing to endear itself to restaurants that increasingly rely on third-party services to offer delivery? Become even worse partners.

Grubhub CEO Matt Maloney said in a letter to shareholders that "promiscuous" diners are partially to blame for the company's recent 43 percent stock fall, and in an earnings call yesterday said, "It's very hard to trick a consumer to pay more than they want to pay," which is sure to make consumers feel great about the honesty and transparency around their burrito orders. So in the face of increased competition and politicians looking to regulate the business, Maloney, as the New York Post writes, "has been piloting an initiative in recent months to expand its restaurant network without officially partnering with eateries." That is, listing businesses without their agreement or permission.

In a statement to Eater, Grubhub said they're adding non-partnered restaurants "so we will not be at a restaurant disadvantage compared to any other food delivery platform." It says this is an opportunity for those restaurants to get more business, "but we'll without hesitation remove any restaurant who reaches out to us and doesn't want to be listed on our marketplace," putting the onus on restaurants to either proactively check the site, or to be surprised when it starts getting Grubhub orders. Grubhub also admits "the non-partnered model is no doubt a bad experience for diners, drivers and restaurants. But our peers have shown growth – although not profits – using the tactic, and we believe there is a benefit to having a larger restaurant network: from finding new diners and not giving diners any reason to go elsewhere."

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