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Convenience may come with hidden costs

Published: Aug. 13, 2020 at 6:58 PM CDT
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SIOUX FALLS, S.D. (Dakota News Now) - Since the pandemic, food delivery services like Grubhub have become more popular. They allow people to enjoy meals from restaurants at home. However, there are a few things some local businesses would like customers to know before they think about using Grubhub for their next meal purchase.

Several Sioux Falls restaurants say they have not partnered with Grubhub, yet their information is up on the Grubhub website, including M. B. Haskett Delicatessen.

“I just don’t think my restaurant is that well-positioned to do delivery. We do a lot of breakfast stuff and like scrambled eggs and poached eggs. They don’t transport very well,” said Michael Haskett, Owner of M. B. Haskett.

As well as McNally's Irish Pub.

“We’ve declined, just it doesn’t make sense with the food costs for us as a small business owner,” said Nicki Ellerbroek, Owner of McNally’s.

“They charge the establishment 20 to 30 percent of the food costs, so at that point, it becomes kind of a wash. It would be just more of like staying relevant to our consumer.”

According to a Grubhub spokesperson, there is a 10 percent fee if restaurants want Grubhub to deliver the food. Grubhub also allows restaurants to market themselves. The marketing fee is negotiable with the average being around 10-15 percent.

Companies like Grubhub work by partnering with local restaurants to deliver food to customers. Even though they've declined to partner up, both businesses recently realized their menus are still on the Grubhub platform.

Dakota News Now Reached out to Grubhub about this. According to a Grubhub spokesperson, in 2019, the company began adding restaurants to their marketplace if they saw there was local demand for delivery. So the restaurants could receive more orders and revenue from deliveries completed by drivers.

McNally’s and M.B. Haskett are not being charged a fee, since they haven’t partnered with Grubhub.

“But they are price gouging the consumer to make up for that difference,” said Ellerbroek.

The platform has also caused frustration for the restaurants as their information is not accurate.

“The menu that they have on their website is old, a lot of the stuff we don’t have on there,” said Haskett.

So sometimes customers end up getting the wrong order.

“It just gets really confusing I think for the consumer,” said Ellerbroek.

And usually, the restaurants are the ones that receive the complaints.

Both restaurant owners agree that Grubhub can be helpful, but that it’s not the best fit for their establishment. And that there is something patrons can do to help out.

“The best thing to do is to call them directly. Look at their website, order what you want, and get curbside delivery,” said Ellerbroek.

Or ask if the restaurant offers its own delivery.

Here is the full statement from Grubhub:

Our mission since we were founded in 2004 has been to connect hungry diners with great, local restaurants. We send nearly 650,000 orders to restaurants a day, and restaurants have received almost $4 billion in sales from orders on Grubhub so far this year. The vast majority of our orders are completed without incident or complaint, but when things don’t go as planned, we appreciate hearing feedback and work hard to make it right. We encourage diners to reach out to our customer care department if they experience any issues with their order.

We partner with hundreds of thousands of restaurants across the country, and the overwhelming majority of our orders are and will continue to be from these restaurants we partner with. Starting in late 2019 in select cities across the country, we’ll add restaurants to our marketplace when we see local diner demand for delivery so the restaurant can receive more orders and revenue from deliveries completed by our drivers. This is a model that other food delivery companies have been doing for years as a way to widen their restaurant supply, and we’re trying it as well to close the restaurant supply gap created by our competitors. We strongly believe partnering with restaurants is the only way to drive long-term value in this business.

If a restaurant prefers not to be on our marketplace or needs to change any information like menu items or hours, they should reach out to us at restaurants@grubhub.com, and we’ll work as quickly as possible to make necessary updates or remove them.

According to a Grubhub spokesperson, both restaurants have been removed from the site as of August 18th.

Copyright 2020 Dakota News Now. All rights reserved.

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