In a letter this week to New York City Council members, Grubhub announced a new phone ordering system meant to address accusations of the service charging restaurants erroneous fees for phone orders. But NYC is not impressed, with Mark Gjonaj, who chairs the small business committee, calling the moves “insufficient.”
With the new system, which Grubhub has dubbed a “common sense step,” customers who call a restaurant through the Grubhub or Seamless platforms will be asked to press #1 to place an order and #2 for any other matter. The change is effective immediately, not just in NYC but nationwide for Grubhub/Seamless users.
The change comes after Grubhub came under fire in 2019 for its controversial billing practice for phone orders. With the old system, the service would bill restaurants for any call made to them via the Grubhub/Seamless platform that was longer than 45 seconds, regardless of whether that call resulted in an order or was simply a customer checking the status of an order. Restaurants were charged anywhere between $4 and $9 per call. On top of that, when the NYC Council held an oversight hearing last June to address issues surrounding third-party food delivery, it was made known that restaurants couldn’t view phone-order charges made 60 days prior.
While that look-back period, as it was called, was eventually extended to include charges made 120 days prior, the NYC Council wasn’t satisfied and in October threatened to pursue legislative action if Grubhub didn’t fix its phone order issues. Grubhub launched a task force in response meant to address the problems.
The new phone order system is part of the findings Grubhub released from that task force. The company also said it is doubling the number of account advisors who can “assist restaurants with phone order inquiries,” though no more specifics were provided.
The Council and others are not impressed, it seems.
“There is nothing in the proposed changes that would make whole the thousands of restaurants that have already paid for what in many cases were erroneous phone order fees,” Gjonaj said in a statement on Thursday. “These are hard earned dollars that could mean the difference between a restaurant staying open or having to close their doors. This is money that Grubhub was never entitled to in the first place.”
Andrew Rigie, the executive director of the New York City Hospitality Alliance, said that “the burden should not remain on the restaurants to listen to messages to determine which fees are bogus.” He added that the major question remaining is whether Grubhub will pay back the money they owe on past erroneous charges.
With the new system, restaurants will now be allowed to listen to every phone order they are billed for, but the look-back period for phone calls remains fixed at 120 days. Grubhub said it would handle issues surrounding older calls on a case-by-case basis.