Online food delivery services can often provide a valuable service, especially when you plan to order ahead, put in a larger order, have specific dietary requests, are unable to pick up an order, or can only pay with a credit card. For restaurants, it can also be helpful to receive electronic orders rather than take them over the phone during rush hours. (Disclosure: my parents own a small restaurant business and are listed on Grubhub / Seamless, so I am familiar with the way the relationship works.)
However, a recent report revealed that Grubhub, which owns food delivery services like Seamless, Eat24, MenuPages, and AllMenus, has been buying domain names to set up dummy websites that resemble local businesses in an alleged effort to intercept online or phone orders and bill bigger commission fees to its restaurant partners. Because these dummy sites are often unaffiliated with the restaurants themselves, Grubhub can claim it’s brought additional business to the restaurant and can then charge a larger commission (from as low as 3 percent to 20 percent and higher), along with other service charges like credit card processing and delivery fees.
This tactic, while not entirely new, can result in massive revenue cuts for the restaurants and other independent contractors, from small business owners to delivery workers. Grubhub says its contract permits them to set up these dummy sites as a marketing service to restaurants, even though the result can end up hurting small businesses that aren’t skilled at running their businesses on the internet (or familiar with legal contract languages).
If this troubles you, you may wish to avoid using online delivery services when making your next lunch, dinner, or grocery order. Here are some ways to minimize the effect that these commission fees have on your local shops, and help keep them in business.
Verify local business information
While Google is a good resource when it comes to searching for local businesses, it’s also a user-generated service, which means it is not immune to providing unreliable information. If a local business hasn’t claimed its online listing, it is susceptible to being taken over by an unaffiliated third party that can add inaccurate information.
Fake sites like the ones set up by Grubhub can also provide the wrong information, such as a rerouted phone number that doesn’t actually belong to the restaurant but, when used, allows Grubhub to charge an increased commission fee.
So while it’s a good idea to call a business directly so that it gets the full value of your order, make sure you have verified the contact information before doing so. Perform several searches for a business you’re interested in to cross-check phone numbers and addresses. If you find what looks to be an official business site, check the links to ensure they actually belong to the business. (Grubhub’s “microsites,” for example, show “Grubhub Holdings Inc.” buried at the bottom of the page, with multiple links across the site leading to the company’s subsidiaries.)
Remember that Grubhub Inc. owns multiple subsidiaries, including Seamless, AllMenus, LevelUp, Tapingo, MenuPages, and Eat24, so these are not reliable sources for cross-checking information. In fact, the same business may show different phone numbers on its Seamless listing versus the one on MenuPages, further adding to the confusion.
To avoid relying on these sources, you can cross-check information with traditional, unaffiliated directories like the Yellow Pages, Whitepages, or the Better Business Bureau. You can search for businesses by name or address and specify the city you’re in.
Another way to cross-check a business address is by using Google Maps’ Street View function to match the address to the storefront. If a street view is available, Google Maps will often show a photo above the search result, or you can click the yellow person icon on the lower right corner and drag it to the part of the map you want to see. (If the street view is available, the street on the map will turn blue.)
Of course, this might not always work if you are in a smaller town. In addition, Google’s information could be outdated. If these methods aren’t helpful, the absolute best and most accurate option requires the most work: to personally visit the businesses you want to interact with and get information directly from the source.
Once you are sure you have accurate business information, you can order direct. This doesn’t always mean you have to place your order over the phone or in person.
Businesses that know that many people prefer to make transactions online may offer their own apps / online ordering forms on their websites. In New York City, for example, local restaurant chains like Mighty Quinn’s Barbeque and Num Pang Kitchen offer links on their sites or to an app that lets you put in orders without having to go through third-party delivery services.
Smaller, independently owned restaurants may still employ services like Grubhub to provide online ordering. If you must use a third-party service, make sure you are on the correct website (again, check the site’s copyrights at the bottom) and order direct from that business’s page. This ensures you’re minimizing the amount of commission a restaurant has to pay.
If you’re unsure whether these online solutions serve the restaurants best, the best way to find out is to just ask. Call or visit those businesses to check how you can best benefit them.
While we’re talking about phone numbers...
There’s a tricky in-app deep linking that Yelp implements that might catch you off guard. Though a listing may show the correct phone number for a restaurant on the Yelp app, when you click the number to make a call, the number that comes up on your dialer might actually be a different number. The new number is designed to work as a redirect in order to hijack the call and funnel high commissions toward Yelp’s partner, Grubhub.
To make sure you’re really calling the right number, when you tap the phone number to make calls from a Yelp or Grubhub app, take a second to make sure the numbers match. If you’re being presented a different number, clear the digits and be sure to dial in the correct one. This may be hard to remember to do when you’re in a hurry, but it’s worth taking a pause to be extra careful.
While some restaurants have their own delivery crew, other businesses do not, which is where delivery apps often step in to contract a third-party fleet to help transport your order. However, doing so means these companies can also charge an increased commission fee to businesses to outsource the delivery while taking another cut from contracted delivery workers, which can include any tip you add through the app.
So it’s possible that your favorite restaurant doesn’t have its own delivery fleet or doesn’t deliver to your area, forcing you to rely on apps like Grubhub, DoorDash, and Uber Eats to access their goods. If you cannot pick up your order and must use a delivery app, be sure to tip in cash to ensure the service worker receives your intended tip in full. Nothing is more direct than handing them the cash yourself. And whether you plan to tip in cash or through the app, tip well. A 15 to 20 percent tip from your bill’s total is customary.
Ordering food online is convenient, and going through the traditional route can often mean longer wait times and more effort on your part. However, patience and kindness go a long way. The work you do helps support and build stronger communities, and businesses can pass along savings they get from lower commission fees directly to customers themselves.
Update January 29th, 4PM ET: This article has been updated to include Yelp’s phone number swap tactic.
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