Update: According its terms and conditions, Grubhub’s “relief” program defers rather than waives restaurant fees. Restaurants that sign up for the program are required to pay back fees at the end of the relief period. While that has no solid date yet, Grubhub “anticipates that such date will be no later than March 29, 2020.” At that point, restaurants have four weeks to pay back those commissions.
Grubhub announced this morning at a press conference in Chicago that it is setting up a charity fund and also temporarily suspending its collection of commission fees for qualified independent restaurants in the U.S. The initiative, which is a response to the COVID-19 pandemic now impacting daily life around the world, is in collaboration with mayors of large cities around the country, according to a press release emailed to The Spoon.
In the release, the delivery service noted that not collecting these commission fees will provide cash flow relief to independent restaurants, who along with bigger brands can expect to see as much as a 75 percent drop in sales because of the pandemic. More customers are choosing (or mandated) to stay home, which means significantly less foot traffic headed to restaurants. And some cities are putting restrictions on the restaurants themselves. In NYC businesses, for example, must reduce their capacity by 50 percent beginning today at 5 p.m.
Bigger brands (think Chipotle, McDonald’s) have billion-plus-dollar digital businesses to fall back on in this scenario. For mom-and-pop restaurants as well as smaller chains, the slowdown due to coronavirus could be life-threatening to business.
More delivery orders would help, but as I wrote earlier today, third-party services like Grubhub and DoorDash collect per-transaction commission fees that can absolutely gut a business’s bottom line. Which is why it’s encouraging to see Grubhub stepping up and acknowledging the changes it needs to make during this time. Currently, the company is working with mayors of Chicago, New York City, San Francisco, Boston and Portland.
At the same press conference today, Grubhub also said it is setting up a fund that will let proceeds from its Donate for Change program go towards charities that support drivers and restaurants impacted by COVID-19. Through the program, customers can round up the change from each order and donate it. The service will match donations from its subscription service members.
Most of the major delivery services are now offering features like contactless delivery. Some, like Postmates, have set up their own funds to support workers affected by coronavirus. The hope is that others will follow with further measures to protect local businesses as well as the workers transporting our food.
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