As restrictions on the food industry endure, consumers are turning to delivery apps as a convenient way to enjoy takeout from their favorite restaurants without leaving the house. But for restaurants, this convenience often comes at a price.
Spencer Warren, owner of The Warren Bar & Burrow Downtown, posted on Instagram last week asking Pittsburghers to stop using two food delivery apps: GrubHub and Seamless. The post included an image of his restaurant’s GrubHub deposit from April, which was reduced from $16,208.96 to $6,857.97 after the company figured in commission, processing fees, and more.
“We are trying to just survive during these times, we thought [GrubHub] was a good way to get to-go orders, but the amount they steal from us, without our permission, makes it so it costs us money for every order they take,” read Warren's post.
GrubHub is one of five apps that Warren has been using in lieu of in-house service. (The number is now down to four; after receiving the statement from GrubHub, Warren stopped working with the company.) Warren explains that GrubHub's rate when he signed up was 20%, but the April statement – the restaurant's first statement from GrubHub – takes 58% in total.
“During this pandemic especially, we needed to find any source of income we could get,” said Warren. “We understood our profits were going to be very, very slim with GrubHub, because they have all of these set fees. But there were fees that we didn’t know about.”
The statement is broken down into various categories, including commission, delivery commission, processing costs, and promotions. Aside from the agreed 20%, Warren writes in the post, “It is all hidden fees and ‘promotions.’ Apparently, [the GrubHub] rep is allowed to do things to our account without our permission.”
A GrubHub spokesperson responded stating, “Restaurant owners select the services they want and only pay a commission to GrubHub when we help generate sales.”
Warren’s sentiment has been echoed across the city at, he says, restaurants like Iron Born Pizza and My Big Fat Greek Gyro. His social media post also generated several messages of outrage and support from fellow eateries and businesses like Il Pizzaiolo, Natrona Bottling, and DiAnoia’s Eatery.
“The reason we signed up for [GrubHub] in the first place was because they can help get the business' name out there,” he says. “You know, Joe Average, they’ll order from GrubHub and learn about restaurants you didn’t know about. I thought it was a necessary evil until we saw the cost.”
Since he stopped using GrubHub, Warren said orders on The Warren’s website have increased.
(In total, GrubHub accounted for about one-third of orders at The Warren, more than all of the other four apps combined.)
The restaurant is still offering a delivery service through Toast – an app that uses drivers from DoorDash – which has a clear flat rate for every order. Using GrubHub, Warren explains, is basically like “paying customers to eat” at his restaurant.
“[GrubHub and Seamless] are not helping local nor supporting local businesses,” Warren’s Instagram post concludes. “Please stop using GrubHub and Seamless. They are big businesses crushing the small businesses.”