• Restaurants
  • Grubhub suspends ad commissions to help restaurants

    The company will delay up to $100 million in commissions in Chicago and other cities as the coronavirus hits eateries' business.

    Bloomberg

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    79彩票注册网址Grubhub is suspending the commissions it charges to restaurants to advertise on its platform to help offset their declines in business from the coronavirus.

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    The company will delay collection of up to $100 million in commissions in Chicago and other cities, said CEO Matt Maloney.

    Grubhub didn’t say how long the fees would be deferred. Grubhub also said it would divert the proceeds it collects for charity through its Donate the Change effort, about $1 million a month, to charities that can help delivery drivers and restaurants who suffer economically from the coronavirus.

    79彩票注册网址“The majority of our orders come from independent restaurants,” Maloney said. “The independent restaurant business is our business.”

    79彩票注册网址Restaurant business is down 40 percent to 70 percent in the past week, since the outbreak because of the coronavirus, said Sam Toia, head of the Illinois Restaurant Association.

    79彩票注册网址“It was a trickle the last three weeks, then with the cancellations of everything within the past seven days, things fell off a gigantic cliff,” said R.J. Melman, president of Lettuce Entertain You.

    The effort by Grubhub might not excite investors, who already are anxious about the company’s increased spending on things such advertising and marketing, as it battles to regain market share from rivals DoorDash, Uber Eats and Postmates. More recently it announced a cash-back feature to its customer-loyalty program.

    But suspending commissions could help the company win some much-needed goodwill from restaurants. For more than a year, Grubhub’s image has been battered, as restaurant owners in New York complained that high fees, mostly for delivery, were cutting into their already meager profit margins. The New York City Council is threatening a cap on delivery fees and commissions of 10 percent.

    Chicago Mayor Lori Lightfoot and New York Mayor Bill de Blasio praised Grubhub for stepping up. New York City Councilman Mark Gjonaj, one of the company’s most vocal critics, said: “I applaud Grubhub.” He said he also has called on DoorDash, Postmates and Uber Eats to follow suit.

    79彩票注册网址Maloney wouldn’t say whether it has seen more business from the coronavirus. Analysts have suggested Grubhub would be among the businesses that would see a benefit if consumers tried to avoid crowds and public places out of fear of contracting the virus.

    This story has been updated to correct that Grubhub is delaying collection of the commissions, not forfeiting them.

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