Grubhub Inc. is an American online and mobile prepared
food ordering and delivery platform. The company is based in
Chicago, Illinois
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.
Founded in 2004, it is a subsidiary of the Dutch company
Just Eat Takeaway since 2021. Grubhub has been criticized for antitrust price manipulation, listing restaurants without permission, and allegedly misclassifying workers. Grubhub Seamless went public in April 2014 and was traded on the
New York Stock Exchange
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed c ...
(NYSE) under the ticker symbol "GRUB".
As of 2019, the company had 19.9 million active users and 115,000 associated restaurants across 3,200 cities and all 50 states in the United States.
History
Grubhub history
![Food Delivery Service](https://upload.wikimedia.org/wikipedia/commons/a/a4/Food_Delivery_Service.jpg)
The original
Chicago
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-based Grubhub was founded in 2004 by Mike Evans and Matt Maloney to create an alternative to paper menus. Two years later, in 2006, Maloney and Evans won first place in the
University of Chicago Booth School of Business
The University of Chicago Booth School of Business (Chicago Booth or Booth) is the graduate business school of the University of Chicago. Founded in 1898, Chicago Booth is the second-oldest business school in the U.S. and is associated with 10 N ...
's Edward L. Kaplan New Venture Challenge with the business plan for Grubhub.
In November 2007, Grubhub secured $1.1 million in Series A funding, led by Amicus Capital and Origin Ventures for the purpose of expanding into
San Francisco
San Francisco (; Spanish language, Spanish for "Francis of Assisi, Saint Francis"), officially the City and County of San Francisco, is the commercial, financial, and cultural center of Northern California. The city proper is the List of Ca ...
and
New York
New York most commonly refers to:
* New York City, the most populous city in the United States, located in the state of New York
* New York (state), a state in the northeastern United States
New York may also refer to:
Film and television
* '' ...
markets. In March 2009, Grubhub earned $2 million in Series B funding, led by Origin Ventures and Leo Capital, which was followed by $11 million in Series C funding, led by
Benchmark Capital in November 2010. In March 2011 $20 million in Series D funding raise was led by
DAG Ventures.
Grubhub's portfolio of brands includes Seamless, AllMenus, MenuPages, LevelUp, and Tapingo. Seamless is an online and mobile food ordering platform for regional restaurants active in the U.S. and London.
In September 2011, Grubhub secured $50 million in Series E funding and acquired New York–based competitor Dotmenu, the parent company of Allmenus and Campusfood. Grubhub completed the acquisition of AllMenus that month. MenuPages was acquired by Seamless in September 2011.
DiningIn, an online ordering and food delivery company based in
Brighton, Massachusetts
Brighton is a Municipal annexation in the United States, former town and current Neighborhoods in Boston, neighborhood of Boston, Massachusetts, United States, located in the northwestern corner of the city. It is named after the English city of ...
, was acquired by Grubhub in February 2015.
Restaurants on the Run, a corporate food delivery company based in
Aliso Viejo, California, was acquired by Grubhub in February 2015.
["UPDATE 2-GrubHub goes direct to diners after acquisitions"](_blank)
Reuters.com, February 5, 2015.
In December 2015, Grubhub acquired Delivered Dish, a restaurant delivery service in seven markets across the Pacific Northwest and Southwest, including Denver, Las Vegas, San Diego, Portland, El Paso, and Albuquerque. LAbite, a Los Angeles–based restaurant delivery service, was acquired by Grubhub in May 2016.
![GrubHub Logo 2016](https://upload.wikimedia.org/wikipedia/commons/3/3d/GrubHub_Logo_2016.svg)
In August 2017, Grubhub entered into an agreement to acquire Eat24 from
Yelp for $287.5 million, subject to regulatory review. In October 2017, Grubhub announced that had it completed its acquisition of Eat24. In late 2018 Grubhub shut down the Eat24 brand.
Certain assets were acquired from 11 franchisee-owned
OrderUp
OrderUp is an online and mobile food-ordering and delivery company which operated in at least 37 markets. Prior to being acquired by Grubhub, OrderUp was a part of the Groupon family of companies and operated as both OrderUp and Groupon-To-Go.
...
markets in September 2018. Certain assets from 27 OrderUp markets had already been acquired in 2017.
GrubHub completed its acquisition of OrderUp in October 2018.
LevelUp
LevelUp is an American mobile ordering and mobile payments platform created by Boston, Massachusetts–based start-up SCVNGR. On July 25, 2018, it was announced that LevelUp would be acquired for US$390 million by Grubhub, an online food deliv ...
, a Boston-based diner engagement and payment solutions platform was acquired by Grubhub in September 2018.
The acquisition of LevelUp was for a reported $390 million cash.
Tapingo
Tapingo is a mobile commerce application that offers advance ordering for pickup and food delivery services for college campuses.
The company was bought by Grubhub in September 2018 for $150 million.
Tapingo is differentiated from other on-de ...
, a San Francisco–based platform for campus food ordering was acquired by Grubhub in November 2018.
In March 2019, Grubhub took over
SkipTheDishes' operations in the United States after SkipTheDishes announced its exit from the U.S. market.
By mid-2020, in the middle of the
coronavirus
Coronaviruses are a group of related RNA viruses that cause diseases in mammals and birds. In humans and birds, they cause respiratory tract infections that can range from mild to lethal. Mild illnesses in humans include some cases of the com ...
pandemic
A pandemic () is an epidemic of an infectious disease that has spread across a large region, for instance multiple continents or worldwide, affecting a substantial number of individuals. A widespread endemic (epidemiology), endemic disease wi ...
where demand for services delivering food from restaurants and takeaways surged, Grubhub announced it was keeping its drivers safe by offering contact-free delivery as well as the option to order pickup for anyone who felt more comfortable getting the food themselves.
On June 9, 2020, Netherlands based
Just Eat Takeaway announced an agreement to buy Grubhub for $7.3 billion in stock.
Grubhub and Seamless merger
In 1999, New York lawyer Jason Finger founded SeamlessWeb to provide companies with a web-based system for ordering food from restaurants and caterers. Six years later, in 2005, SeamlessWeb introduced a free ordering service to consumer diners to complement the existing corporate-ordering service. In April 2006, SeamlessWeb was acquired by
Aramark and integrated into its Food, Hospitalities, and Facilities segment.
Jonathan Zabusky was named president of Seamless in 2009, and by June 2011, Seamless was re-privatized, as
Boston
Boston (), officially the City of Boston, is the state capital and most populous city of the Commonwealth of Massachusetts, as well as the cultural and financial center of the New England region of the United States. It is the 24th- mo ...
-based Spectrum Equity Associates invested $50 million for a minority stake in the company from Aramark. The company then changed its name from SeamlessWeb to Seamless.
In September 2011, Seamless acquired MenuPages, and in February 2012, Seamless released an
iPad
The iPad is a brand of iOS and iPadOS-based tablet computers that are developed by Apple Inc. The iPad was conceived before the related iPhone but the iPhone was developed and released first. Speculation about the development, operating s ...
app.
In May 2013, Grubhub and Seamless announced that they were merging, with Seamless representing 58% of the equity and GrubHub representing 42% of the equity of the combined business; the merger was finalized in early August 2013.
IPO
Grubhub went public in April 2014 at $26 per share. During its time as a standalone company, it traded on the
New York Stock Exchange
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed c ...
(NYSE) under the ticker symbol "GRUB".
Delivery
In June 2014, Grubhub began offering delivery for restaurants that did not operate their own delivery service. By 2016, the company was delivering in more than 50 markets across the U.S. In July 2018, Grubhub announced that it had expanded its delivery capabilities to 28 new cities in the US.
Grubhub's UK competitors are
Deliveroo and
UberEATS
Uber Eats is an online food ordering and delivery platform launched by Uber in 2014. Meals are delivered by couriers using cars, scooters, bikes, or on foot. It is operational in over 6,000 cities across 45 countries as of 2021. The process of ...
. In the U.S. its competitors include
Uber Eats,
DoorDash
DoorDash, Inc. is an American company that operates an online food ordering and food delivery platform. The company is based in San Francisco, California. It went public in December 2020 on NYSE and trades under the symbol DASH.
With a 56% mar ...
,
Postmates, and
EatStreet
EatStreet Inc. is an American online food ordering service that acts as a centralized marketplace, where diners can order delivery and takeout from restaurants in their area. Founded in 2010 in Madison, Wisconsin, the company has expanded to ove ...
.
In February 2020, the company announced the launch of its new Grubhub+ monthly subscription program, which offers free, unlimited food delivery from partner restaurants for monthly fee.
In 2021, the company announced a partnership with
Yandex to add Yandex
delivery robots to Grubhub platform for food deliveries in colleges.
Announced acquisition
On May 12, 2020,
Uber
Uber Technologies, Inc. (Uber), based in San Francisco, provides mobility as a service, ride-hailing (allowing users to book a car and driver to transport them in a way similar to a taxi), food delivery (Uber Eats and Postmates), package ...
announced that it was approaching Grubhub with a takeover offer. However, on June 9, 2020,
Just Eat Takeaway announced it would be purchasing Grubhub for $7.3 billion in an all-stock deal. The acquisition would create the largest online food delivery service outside of China, and provide Just Eat Takeaway with a base in the U.S. market.
North American headquarters would remain in Chicago with Grubhub founder, Matt Maloney, joining the board of directors and heading North American operations.
On June 10, 2021, Just Eat Takeaway took operations of Grubhub as Grubhub stockholders approved Transaction with Just Eat Takeaway. The sale was completed on June 15, 2021. As part of this, Grubhub's logo was changed to include the Just Eat Takeaway house.
Post acquisition
In April 2022, Just Eat said that it would consider a full sale of Grubhub after Cat Rock Capital, an
activist investor
An activist shareholder is a shareholder who uses an Equity (finance), equity stake in a corporation to put pressure on its management. A fairly small stake (less than 10% of outstanding shares) may be enough to launch a successful campaign. In com ...
, pressed the company to focus on European markets.
In July 2022,
Amazon
Amazon most often refers to:
* Amazons, a tribe of female warriors in Greek mythology
* Amazon rainforest, a rainforest covering most of the Amazon basin
* Amazon River, in South America
* Amazon (company), an American multinational technology c ...
struck a deal with Just Eat to offer
Prime
A prime number (or a prime) is a natural number greater than 1 that is not a product of two smaller natural numbers. A natural number greater than 1 that is not prime is called a composite number. For example, 5 is prime because the only ways ...
customers free Grubhub+ membership for a year. The partnership allows Amazon to take a 2% stake in the company with the option to acquire up to 15% based on performance.
In popular culture
Throughout 2020, Grubhub released a series of
computer-animated
Computer animation is the process used for digitally generating animations. The more general term computer-generated imagery (CGI) encompasses both static scenes ( still images) and dynamic images (moving images), while computer animation refe ...
television commercials of people ordering food on the app. In January 2021, one of these commercials, called "Delivery Dance", became popular on the internet as a
meme
A meme ( ) is an idea, behavior, or style that spreads by means of imitation from person to person within a culture and often carries symbolic meaning representing a particular phenomenon or theme. A meme acts as a unit for carrying cultural i ...
, with many people uploading parodies of it. The commercial shows several people dancing after ordering food from Grubhub, set to "
Soy Yo" by the
Colombia
Colombia (, ; ), officially the Republic of Colombia, is a country in South America with insular regions in North America—near Nicaragua's Caribbean coast—as well as in the Pacific Ocean. The Colombian mainland is bordered by the Car ...
n pop band
Bomba Estereo. The commercial was panned, as it was seen as too obnoxious. Comparisons were made online between this ad and a similar ad from the grocery store chain
Kroger.
Controversy
Labor lawsuits
''Lawson vs. Grubhub''
In February 2018, US Magistrate Judge Jacqueline Scott Corley found that Grubhub correctly classified plaintiff Raef Lawson as an independent contractor and rejected his misclassification claim in the ''Lawson vs. Grubhub'' court case.
In a 2017 lawsuit, attorney Shannon Liss-Riordan said that the company uses words such as ''blocks'' instead of ''shifts'' to re-label words and create a false narrative to justify its misclassification of drivers as contractors.
''Wallace v. Grubhub Holdings''
The ''Wallace v. Grubhub Holdings'' contractor lawsuit alleges that Carmen Wallace and Broderick Bryant and other drivers were misclassified as independent contractors and Grubhub defied wage-and-hour requirements under the Fair Labor Standards Act, the Illinois Minimum Wage Law, and the California Labor Code.
The plaintiffs in ''Wallace v. Grubhub'' claim that the work of these drivers makes them employees rather than independent contractors. Wallace and Bryant argue that drivers work on scheduled shifts, and must work in a certain area. "The drivers as a general matter cannot engage in personal non-work activities during their GrubHub shifts," the complaint states, meaning that they essentially function as employees. They also allege that they do not receive the same benefits that an employee does. Grubhub drivers are allegedly required to pay some of their expenses. Because of how they are paid, the plaintiffs claim they may often get paid below federal or state minimum wage, even when they work long hours. Many drivers allegedly work more than 40 hours a week but do not receive overtime rates for their work.
According to the Grubhub contractor lawsuit, the company violated several FLSA and Illinois laws by failing to pay overtime and failing to pay minimum wage. The plaintiffs filed their class-action Grubhub contractor lawsuit on June 29, 2018, in the U.S. District Court for the Northern District of Illinois.
Broderick and Carmen filed the lawsuit on behalf of themselves and all others in a similar situation and the case is ongoing.
Phone order fees
In 2019, the company was sued for charging restaurants fees for phone calls taking place on Grubhub-issued phone lines lasting over 45 seconds—whether they resulted in orders or not. Grubhub agreed to extend the refund window for restaurants that have been unwittingly charged for phantom orders. The restaurants themselves must review and audit call logs within the refund window in order to identify and dispute fees erroneously charged to them by Grubhub's algorithm.
Political statement
On November 10, 2016, after the victory of President
Donald Trump
Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
Trump graduated from the Wharton School of the University of Pe ...
in the general election, Grubhub President and CEO Matt Maloney sent a company-wide memo to employees saying that he rejected the "nationalist, anti-immigrant and hateful politics of Donald Trump" and "If you do not agree with this statement then please reply to this email with your resignation because you have no place here.”''
The Washington Times
''The Washington Times'' is an American conservative daily newspaper published in Washington, D.C., that covers general interest topics with a particular emphasis on national politics. Its broadsheet daily edition is distributed throughout ...
'' reported that Maloney "unleashed a political screed after the Nov. 8 election and said that those who disagree with its anti-Trump views should resign."
After a
Twitter
Twitter is an online social media and social networking service owned and operated by American company Twitter, Inc., on which users post and interact with 280-character-long messages known as "tweets". Registered users can post, like, and ...
boycott campaign was initiated, Maloney later claimed his words were "misconstrued", adding "I want to clarify that I did not ask for anyone to resign if they voted for Trump. I would never make such a demand. On the contrary, the message of the email is that we do not tolerate discriminatory activity or hateful commentary in the workplace and that we will stand up for our employees."
In a tweet that was later deleted, Maloney added: "To be clear, Grubhub does not tolerate hate and we are proud of all our employees - even those who voted for Trump."
By Thursday night, the hashtag
#BoycottGrubHub was trending on Twitter.
Following Maloney's statement, on November 11, 2016, the company's shares dropped 5.93%.
Referral numbers on Yelp listings
An August 2019 episode of the podcast Underunderstood reported that Yelp listings for some restaurants provide Grubhub "referral numbers" which, when called instead of the restaurant's phone number itself, facilitate the recording of the calls and can result in the restaurant being charged commission fees, even in some cases when resulting in no order.
Cybersquatting
In June 2019, reports came out alleging that Grubhub had registered more than 23,000 web domains in restaurants' names without their consent, in what was cast as "an attempt to generate greater commission revenue and prevent restaurants from building their online presences." Grubhub disputed the allegations, insisting that restaurants had explicitly agreed in their contracts with Grubhub to allow web domain purchases and the creation of websites advertising their businesses.
Allegations of monopolistic behavior
In April 2020, a group of New Yorkers sued DoorDash, GrubHub, Postmates, and Uber Eats, accusing them of using their market power monopolistically by only listing restaurants on their apps if the restaurant owners signed contracts that include clauses that require prices to be the same for dine-in customers as for customers receiving delivery. The plaintiffs state that this arrangement increases the cost for dine-in customers, as they are required to subsidize the cost of delivery; and that the apps charge “exorbitant” fees, which range from 13% to 40% of revenue, while the average restaurant's profit ranges from 3% to 9% of revenue. The lawsuit seeks triple damages, including for overcharges, since April 14, 2016, for dine-in and delivery customers in the United States at restaurants using the defendants’ delivery apps. The case is filed in the federal U.S. District Court, Southern District of New York as Davitashvili v GrubHub Inc., 20-cv-3000.
Although a number of preliminary documents in the case have now been filed, a trial date has not yet been set.
Listing restaurants without permission
In October 2020, a group of restaurants launched a class-action suit against Grubhub for having included them in its listings without having asked permission (or, in some cases, despite permission having been denied), because this caused "damage to (the restaurants') reputations, loss of control over their customers’ dining experiences, loss of control over their online presence, and reduced consumer demand for their services"; plaintiffs specifically cited that Grubhub would list obsolete menus with invalid prices and/or unavailable options (leading to customer complaints) and that Grubhub refused to delist restaurants upon request.
[Grubhub Hit With Lawsuit for Listing Restaurants Without Permission]
by Jaye Saxena, at ''Eater
Eater may refer to:
* Eater (band), an English punk rock group
* "Eater" (''Fear Itself''), a 2008 episode of the NBC television horror anthology ''Fear Itself''
* ''Eater'' (novel), a 2000 science fiction novel by Gregory Benford
* ''Eater'' (w ...
''; published October 28, 2020; retrieved October 30, 2020 This practice was banned in California in 2021 for its abuse of restaurants.
2022 New York City free lunch promotion
On May 17, 2022, Grubhub offered a promotional code offering free lunch for those ordering in
New York City
New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...
. Grubhub's system and local restaurants were immediately overwhelmed after fielding nearly 6,000 orders per minute. Grubhub released a statement the same day stating they let restaurant workers know in advance, but the claim was immediately disputed by workers.
Multiple outlets regarded the promotion as a "disaster," with restaurants unable to keep up with the demand and insufficient delivery workers available to pick up orders, resulting in wasted food and customers without their meals. Restaurants were left facing angry customers, refunded orders, and inability to reach Grubhub's customer service.
Price disclosure
In November 2022, Pennsylvania Attorney General
Josh Shapiro
Joshua David Shapiro (born June 20, 1973) is an American politician and attorney who has served as the Pennsylvania Attorney General since 2017. A member of the Democratic Party, he is the governor-elect of Pennsylvania.
Raised in Montgomery ...
sued Grubhub claiming that the service failed to properly disclose that prices for food ordered through GrubHub could be higher than the same item ordered at a restaurant. The investigation by the attorney general's office also found that Grubhub would route web traffic from users to
microsites that host a restaurant’s menu as well as third-party websites, such as
Yelp or
Menupages.com. Later that same month, a settlement was announced whereby Gruhub would be required to pay $125,000 to several Pennsylvania food banks and be more transparent about its pricing. As part of the settlement, GrubHub will be required to add price disclosures to their menu and checkout-pages.
References
External links
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American companies established in 2004
Retail companies established in 2004
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American subsidiaries of foreign companies
Companies formerly listed on the New York Stock Exchange
Online food ordering
2021 mergers and acquisitions