Restaurant owners are boiling mad after Grubhub Chief Executive Matt Maloney revealed this week that the company has been adding “tens of thousands” of new eateries to its sites — and isn’t charging them any fees for its services.
Shares of the food-delivery giant — which also operates Seamless in New York — plunged 43% on Tuesday after it slashed its profit outlook, blaming fierce competition.
To fend off threats from faster-growing startups like DoorDash and Postmates, Maloney said Grubhub in recent months has begun to copy their strategy — namely, by aggressively adding new, “non-partner” restaurants to its site in an arrangement that bills the customers for delivery instead of the restaurants.
The problem: Grubhub is at the same time still charging commissions and fees to the thousands of eateries that were already listed on its site.
Some say they’ve noticed that business has fallen off lately, and believe they’re getting cannibalized by the tide of newcomers.
“We are paying these commissions to Grubhub to be promoted on their platform, and yet they are posting menus of restaurants that are not paying them,” said Michael Lombardo, owner of Il Mattone, a Tribeca pizzeria. “I feel this could bury us because Grubhub is saying, ‘We’ll add any restaurant now.’”
Lombardo was so incensed by Maloney’s admission that he asked a Grubhub rep on Wednesday to switch his account to “non-partner” status.
In response, he says that Grubhub refused, and even threatened to “delist” his pizzeria from its network altogether.
“This is not our policy,” a Grubhub spokesman told The Post. “We will make sure that this was an isolated conversation and that all restaurant owners — partners and non-partners — see the value in our platform.”
Not all of the “non-partner” restaurants are happy, either. Mortimer Nase, who owns Windward Tavern in Brick, New Jersey, gripes that Grubhub has posted a two-year-old version of his menu on its site.
On top of having to explain that Windward no longer offers beef barley soup, tuna wraps or a New York strip steak sandwich, Nase said his sit-down customers are being forced to push through throngs of “not very presentable” delivery guys waiting near the entrance to pick up orders.
“The drivers are representing me without my permission,” Nase said. “We don’t want to do delivery, but it’s being thrust on us.”
Another Big Apple restaurateur who complained about declining take-out orders at one of his burger joints says a Grubhub rep admitted it was likely because of increased competition with other restaurants on the site.
“She told me that Grubhub had been adding more restaurants to its system,” which has created more competition on the network, said the restaurateur, asking not to be named.
Despite the uproar, a source said Grubhub believes a wider selection of eateries is the way to go.
“We plan to expand our unpartnered inventory,” Maloney said on a Tuesday call. He also conceded the arrangements can be a “bad experience” for diners, drivers and restaurants alike.