Grubhub on Friday announced it is temporarily suspending collection of up to $100 million in commission payments from impacted independent restaurants nationwide. The suspension is in response to the impact of COVID-19 on restaurants.
Update: After publishing, Grubhub clarified that the suspendion was only for marketing fees, not delivery or other fees. The company also clarified that restaurants would have to pay Grubhub all fees after the defferral period. NRN is waiting for additional information from Grubhub.
Statistics vary, but some estimate that dine-in traffic is expected to slow up to 75% over the next few weeks.
"Independent restaurants are the lifeblood of our cities and feed our communities," said Matt Maloney, Grubhub founder and CEO in a news release. "They have been amazing long-term partners for us, and we wanted to help them in their time of need. Our business is their business — so this was an easy decision for us to make."
Maloney made the announcement in Chicago along with the city's Mayor Lori E. Lightfoot. Mayors of New York City, San Francisco, Boston and Portland, Ore. also worked with the third-party marketplace on the commission suspension, according to Grubhub.
"The city of Chicago is deeply concerned about the risk COVID-19 is placing on the health of our residents and communities, as well as the impact it's having on our working families and neighborhood economies and restaurants," said Lightfoot.
"That is why we applaud corporate leaders like Grubhub who are stepping up with practical measures to support small businesses and their employees. Now more than ever, we must work together to ensure hardworking Chicagoans receive the support they need to thrive while also staying safe, secure, and healthy," she said.
Grubhub and other third-party marketplaces such as DoorDash have come under fire for the fees they charge to restaurants. Sometimes these fees are as high as 30%. The New York City council, among other jurisdictions, has even tried to curtail these fees.
In late February, New York City Councilman Mark Gjonaj, proposed a 10% cap on fees for third-party marketplaces. But he commended Friday's announcement from Grubhub.
"I applaud Grubhub for taking the temporary action of suspending the marketplace commissions paid by its restaurant partners as the hospitality sector seeks to cope with the devastating and door closing impact of the coronavirus pandemic," he said in a statement. "With that said, my office and I have already begun conversations with other third-party food delivery providers such as DoorDash, Postmates and Uber to ask them to reduce their fees and implement other relief measures as restaurants cope with an unprecedented loss in business. Based off of these initial conversations, I feel encouraged that they will do the right thing and put people over profits during this moment of crisis."
In the same announcement, Grubhub also noted the creation of a fund to support restaurants and drivers impacted by the COVID-19 health crisis. Dubbed Donate the Change, the program will allow customers to round up the change from their orders and donate it to the Grubhub Community Relief Fund.
"Banding together during hard times, putting people over profit, and supporting our local businesses is a model we should all follow, and I thank Grubhub for leading the way," said New York City Mayor Bill de Blasio.
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