July 2, 2019
The uneasy relationship between third-party delivery providers and restaurateurs may be taking a turn for the worse now that news has broken that Grubhub and its Seamless unit have purchased more than 23,000 web domains that either use or approximate the names of thousands of restaurants. The report, by the non-profit organization New Food Economy, indicates that Grubhub and its Seamless subsidiary have made the purchases of the critical online names, which then prevents the actual brands from using those same domains to support their existing businesses.
The report also said that Grubhub appears to also have unauthorized "shadow" pages on some of the domains. These pages do still result in restaurant orders, the report said, though they also are assumed to direct business away from websites that are truly operated by restaurant brands, as well.
According to information presented in a follow-up report on CBS News, Grubhub's fees are based on its marketing, and can range from 22% to 40% according to the media's organization's source. In practice, this means that if a diner finds a restaurant on Grubhub's app or one of the company's promotions, Grubhub gets a bigger commission off the order than if a diner ordered for Grubhub delivery through the restaurant's real website.
Grubhub told New Food Economy the micro-sites were created to help restaurants have "another source of orders and to increase their online presence." It also said the service is no longer available and restaurants which request it to do so will have their domains transferred to them.
A class action complaint was filed late last year against the company by restaurateurs who said Grubhub adds on fees by counting diner complaints and questions on the service as orders. Grubhub has said the suit is "without merit."
Topics: Mobile Apps, Online Purchasing, Restaurants
Companies: Grubhub
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