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I hope there's a strong precedent set here. Companies like Grubhub list restaurants on their site/app, but put the wrong phone number on it- one that goes to their own people instead. That's clearly some kind of fraud or misrepresentation.
Makes me feel like I should setup a phone number and a website called something like "GrubhubHelp.com", and list a help number for assistance with GrubHub orders. Then when customers call to complain, I'll play an ad for the competitor who has paid me the most money.
Seems only fair, right?
FYI - the same thing happens with Hotels.com. When you "call the hotel" with the number listed, I learned that the representative is actually a Hotels.com rep, not a hotel employee or hotel call-center employee.
This matters. In my case, I asked about my corporate discount and they gave me a vague answer about "I dont see anything in the system", which I guess was technically not a lie, but definitely deceitful. I wised up because I knew we had a corporate discount and asked who I was speaking to. They gave vague answers like "I'm the call center representative" or "I'm here to help you book with X hotel".
The scam is they are trying to book you at a higher price w/o applying any corporate discounts, etc (and probably keeping a booking/affiliate fee). This should be illegal.
[ Disclaimer: GH employee but speaking independently & not representing the company in this message ]
You're mixing up controversies - there was a separate "feature" Grubhub did years ago where grubhub would stand up online presence for restaurants to bring in web search traffic (branded websites, search results on grubhub.com, etc) and list a grubhub phone number instead of the real phone number so that grubhub could collect comission on the orderflow that they're raking in for the restaurants. These were partnered restaurants, so they were signing up for this and could opt out of any of these services, in theory anyways I wasn't part of this so I have no idea if it's really that easy to opt out
Separately, a practice pioneered by ubereats and doordash, "Place and Pay" is a new thing in the past 2-3 years where Grubhub will just list a bunch of restaurants without them asking for it ("non-partnered"), and when you place an order online the driver will go in and order takeout, then carry it to you. The restaurant can opt out of this, but they never asked for the service in the first place so it's kinda shitty. That's what this article is about.
Grubhub was against place and pay at first, when UberEats and Doordash began doing it (not because Grubhub is selfless but because partnered restaurants are way more profitable), but resisting place and pay turned out to be a recipe for losing market share so that's no longer the case.
Why play an ad when you can provide bad service, and so ruin their reputation; like they might be with restaurants?
I stopped using Uber Eats and local alternatives here in South Africa, because I learnt on a day where they provided poor service; that they charge up to 50% more than the restaurant, all (3 services) have the exact pricing (collusion?), and still pay their drivers terribly.
They kill restaurants' delivery businesses, which although fragmented, offer better service overall, and are much cheaper + accountable if an order goes wrong.
GrubHub being opaque might be making people write off a lot of places. "I won't eat here, they got my takeout order wrong twice before".
Grubhub is taking a deliberate action misrepresenting the restaurant and that action is harming the restaurant (in more ways than one). I imagine they can make a successful case but it's going to be a long expensive fight.
If you want fraud/misrepresentation, Postmates puts up incorrect menus and accept orders on things the restaurant doesn't even make
This is a tough issue in the abstract, because information wants to be free, right?
But there seems to clearly be something like fraud going on, and the involuntary nature of restaurants perceived to be participating is... weird.
>Companies like Grubhub list restaurants on their site/app, but put the wrong phone number on it- one that goes to their own people instead.
Slice does something similar. They set up fraudulent websites for local pizzerias, so they can direct people to order through their app:
I solve this issue by never using Grubhub and calling restaurants directly. I'm here to support restaurants, not Grubhub.
> That's clearly some kind of fraud or misrepresentation.
I don't really understand this point of view.
They're saying you'll get food from restaurant X. That's exactly what you do get, at the price you agreed.
I can't conceive how that's fraud or misrepresentation?
This would be the most awesome troll of SV startups. Own the directory of help for all SV tech companies and create an AdSense for that.
Unless I'm missing something, the substantive difference hereis that GrubHub is still ordering from the restaurant that the customer is ordering from.
Your comparison of pretending to offer GrubHubHelp but then going to competitors is like if I ordered McDonalds, and you brought me pasta.
I don't see anything intrinsically wrong with what GrubHub is doing, but I could see them needing to clearly note the relationship. There are lots of personal shopping/delivery services which phone in orders and go pick something up without having a pre-existing relationship with the restaurant.
The lawsuit [1] lists the following Factual Allegations:
• Gruhub tells consumers it’s working cooperatively with restaurants
• Grubhub decides to add unaffiliated restaurants to its website and mobile apps without the restaurants’ permission
• Grubhub’s unauthorized use of restaurants’ names and logos misleads consumers and harms restaurants
• Restaurants have good reasons for choosing not to work with Grubhub
◦ Grubhub knows restaurants don’t want its business and tells drivers to disguise their affiliation with Grubhub
◦ Consumers continue to believe restaurants on Grubhub are working cooperatively with Grubhub
◦ Customer confusion leads to poor experiences that hurt restaurants’ hard-earned reputations
◦ Grubhub diverts and impairs demand for local restaurants
• Grubhub knows it is harming restaurants and uses that harm to force restaurants into unwanted partnerships
[1] https://www.classlawgroup.com/wp-content/uploads/Grubhub-Cla...
Sounds like an open-and-shut case, but GH has the backing of SV lawyers so chances are it'll drag on for 3 years or end in settlement.
Interestingly, the damages can be calculated and definitely add up.
Restaurants spend a lot of time and effort to build up loyal, lifetime customers that are created by giving them three exceptional experiences in a row. There is a lot of research on getting to three exceptional experiences in return for a lifetime customer. Those exceptional experiences require investments in staff and training and take a long time to pay off.
Having GrubHub break that effort through misrepresentation they are destroying the lifetime value of those customers. If you apply that math to slightly more premium venues, GrubHub is easily costing restaurants hundreds of thousands in revenue through lost lifetime value.
Restaurants are complex, fragile businesses, and this practice damages them at the core of their business.
Will be interesting to see how this plays out in court.
A counter point is that an individual is free to hire someone to go and pick up food from a restaurant on their behalf and it does not make any difference to the restaurant.
I suspect that what restaurants fear, though, is that Grubhub is trying to grab as much marketshare as possible then once they are in a position of strength they'll go and demand a commission from the restaurants, or else...
DoorDash does this too: https://news.ycombinator.com/item?id=23216852
In many cases, it can hurt the reputation of restaurants. Maybe your food doesn't travel well, or you don't have the capacity to handle orders beyond what you have physical seating for...
Absolutely! Bad reviews because of the delivery service impacts the said restaurant. This type of middleman service should be optional IMO.
A lot of companies do things like this where they pretend to be another company to scoop in business as a middleman. Recently googled a tradesperson and called the number on the top result that came up. It quickly became clear that I wasn’t talking to the outfit I was trying to call but someone trying to insert themselves in the middle and collect a fee. When I grilled them it became clear what was going on.
I eventually hung up and found a new number which put me in touch with the company directly. When I told them what happened they were like “yeah (insert name of one stop shop for home repairs) has been doing this... we have nothing to do with them but they keep trying to pretend we work with them and put out adverts under our name.” Super frustrating and I can sympathize with the restaurants where the same sort of thing seems to be happening.
The likes of Google could of course police this a lot better but they’re happy to take the money for the ads.
Trading under another brands name -- by listing them as an ordering place with an unofficial dark kitchen associated in your app -- seems like the most egregious form of trade mark infringement.
Why aren't GrubHub concerned about the legal reprecussions of this?
>Why aren't GrubHub concerned about the legal reprecussions of this?
When is the last time a company was SERIOUSLY threatened by the repercussions of doing something illegal in the US? When was the last time a company was fined/sued out of existence for something they were doing to average people?
Because "justice" in the US is not about who's right and who's wrong, it's about who's got the most money and resources to pursue a lawsuit.
How many mom and pop restaurants do you know of who have the extra financial capital to find a lawyer to sue over an issue like this against a company as well-funded as grubhub or doordash?
breaking laws/operate in the gray area is often touted as "silicon valley disruption" from AirBnB, Uber...etc.
Mind elaborating on where the dark kitchen comes into play?
If I sell you some 2nd hand Lego bricks, the same logic aplies.
I am not affiliated with Lego, yet the thing I am selling was legitimately made by Lego a while ago. When I describe what I'm selling, I clearly say I am offering lego bricks for sale.
Here grubhub seems to be doing the exact same thing with food. Hard to see how one can be illegal while the other isn't.
At the size / scale of grubhub, it will always be cheaper to do unethical things for money now versus settling out of court later.
Knowing someone that used to do sales at grubhub, this doesn't surprise me at all. The company that person currently works at is probably doing the same, because if you can get away with it, why not? Worst thing that happens to the people who put those policies in place is they find another job.
i'll go even further... the other thing about it is that the owner has to have the money is order to bring the lawsuit to court. also, depending on how backed up the courts are, it could be years before the case brought into court by which time the owner could be out of business.
it really is horrible how screwed up our civil court system is.
I have a friend with a small restaurant business and learned about some of the sketchy things grubhub does . Some people order food, my friend's business delivers the food and a few hours after the food was delivered the order is cancelled. Grubhub refunds the money to the person who ordered and refuses to do absolutely anything about it for the business. He filmed on his phone when dropping the food, handing it to a customer and Grubhub shrugs their shoulders. They suggested he creates a a black list of numbers+addresses to refuse orders but that isn't fool proof, the sketchy customers use different numbers and order at a slightly different address and wait outside for it. They may add numbers to a black list as well but some of these bad customers use burner phones.
So a big problem with these middleman services is that control is completely ceded to the middleman and one can't really do anything about it. It is extremely frustrating for business owners, but probably not as bad for the customers. This type of competition a la Grubhub/Amazon will kill a lot of legitimate business and create their own generic services instead. It is a subjugating experience and business owners don't feel that they are control of their own destiny. It saddens me that this trend doesn't seem to get any better but only exacerbate over time.
They should lose their ass for this. It hurts the reputation of small restaurants when the food isn't good and it might not even be their fault. Shouldn't there be some kind of health code rules for food delivery?
The “place and pay” orders the lawsuit describes are new to me. I’d always kinda held the position that saying “We’ll deliver you food from Lou’s Diner” doesn’t necessarily imply you’re affiliated. But if Grubhub is telling drivers to disguise themselves because restaurants wouldn’t accept the order if they knew it was from Grubhub, that seems pretty clearly unethical.
In a similar situation, the alcohol delivery service Drizly received a ton of backlash for buying ads on the brand terms of a Black-owned wine shop in Boston that they had no affiliation with. When buyers understand how platforms do this, they are pretty clear that they don’t agree with it.
https://www.instagram.com/p/CGpUGbuAc-q/?igshid=1u5yor18vch0...
Tbh I don't see a major problem with this. If folks want to pay someone (Grubhub) to go pick up food for them, why should the restaurants be allowed to say no?
> Food may not travel well.
Fair point, but if the customer still wants it, that's on them.
> But that may lead to unfairly low ratings for the restaurant.
If (say) 30% of the restaurant's patrons choose to get the food via food delivery, why shouldn't those folks' ratings of the food be factored into the restaurant's rating?
> If people want food and the restaurants doesn't want to support delivery apps, then folks should respect that and visit the restaurant in person.
Many people aren't able to visit in person, either due to time constraints, mobility constraints, COVID precautions, or other reasons.
> Restaurants may not be able to handle the additional load placed on them by these services.
I empathize with this one and don't really have a rebuttal.
> Delivery services sometimes make their own websites and phone numbers more prominent than the restaurant's own, deceiving people into using them instead of going straight to the restaurant's site/number.
I agree, this is a horrible tactic and aggregators like Google and Yelp should work to prevent this.
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These are just the opinions of me, a privileged engineer who has little knowledge of the restaurant industry, so I definitely welcome any criticism to my points and am certainly open to changing my view!
We finally started driving across town to get carry-out once we realized how big a difference in cost it was. Not only is there a fee but I think they're also inflating prices, and for some restaurants they kept getting the order wrong.
Plus the tip goes to their driver, not the restaurant. I mean yeah, props to the driver driving all over getting my food, but I want my guilt money to go to the cooks, who are breathing each other's air in a kitchen so I can stress eat, just feeling lucky they still have a job at all.
I'll admit I don't know the full story behind grubhub's practices with adding restaurants without the owners' permission.
It does sound like a case of "fake it till you make it", in a sense that adding restaurants without the owners' consent would be a way around the chicken and egg problem.
Not saying it's a particularly nice thing to do, I'd be super annoyed if it happened to me
I’m not an expert in this area, and IANAL, so...
When I started a business (is the USA) that had a name that wasn’t mine, I needed to file a DBA (doing business as) form in my city. If GrubHub is representing themselves as SomeRestaurantIncorporated without some legal mechanism for doing so, like a DBA, I don’t see how they can justify it.
What's the "best" ordering app to use these days if I want to prioritize how well they treat restaurants? I've tried looking this up recently to no avail.
I know at the end of the day, "call and pick-up directly" is going to be it but occasionally I just don't want to go pick it up.
Would love to find a search engine that does not give any results from intermediaries like grubhub and yelp. Let me find the restaurants and judge them for myself based on their service
Imagine if a site like AppleiPhone.com was setup and selling iPhones as a front to Apple.com, complete with their own shopping menu and phone number that they owned instead of Apple.
another example of "silicon valley disruption" operate in the gray area. not sure why Grubhub think they can just add whoever they wanted into their listing without asking. we've seem this kind of "silicon valley disruption" with AirBnB, Uber...etc. its no wonder these companies needs massive amount of money to deal with lawsuit like this or govrt.
This is a one-at-a-time identity theft racket that can be combined with assorted stolen SSN etc, via address matching as well as the genuine credit card number for the order. I expect this resource is already being mined by various crime gangs. It is well distributed so it acts like broadband system 'noise' = harder to find and footprint analyze. Of course, the gangs know all about data footprints and how to obfuscate them.
The result will depend on difference between "could harm" and "actually did harm".
This was an "accident" waiting to happen.