Viral Facebook Post Shows Just How Little Restaurants Make From Grubhub Orders

May 01, 2020 Admin 0 Comments

Plus, Elizabeth Warren is rallying with restaurant workers, and more news to start your day

A post by a Chicago pizzaiolo has people shocked over delivery fees

Third-party delivery platforms like Grubhub and Doordash have come under fire for their treatment of restaurants, whether it’s by charging them for phone calls, or signing them up for services they never agreed to. And while being able to offer delivery is a lifeline for many restaurants right now, it’s hardly a perfect solution with processing and commission fees eating a big chunk out of restaurant profits. Giuseppe Badalamenti, owner of food truck Chicago Pizza Boss, posted his March Grubhub statement to Facebook to give people a sense of just what the breakdown is. And people are stunned.

Badalamenti’s post shows he took in $1,042.63 in 46 pre-paid orders (42 delivery and 4 pickup), and yet only netted $376.54, what he says is “almost enough to pay for the food.” On its website Gruhbhub breaks down the different fees: there’s the marketing commission of about 20%, which is also applied if the business “offers [its] own delivery,” a delivery commission of 10% if it doesn’t, a processing fee, and more. There’s also a $231 “Promotions” charge, which is unexplained. However, in April, Grubhub offered a promotion where customers could receive $10 off orders of $30 or more. However, the fine print said restaurants who opted in would eat those costs, and that Grubhub would charge commission based on the pre-discount price of the order.

Based on the percentages provided by Grubhub, Badalamenti is being charged correctly. Though whether you consider him to be charged fairly is another issue. Third-party delivery sites have certainly helped many restaurants by outsourcing delivery staff, but now many businesses are questioning the costs, and have begun asking customers to call directly if they have an order. Ordering online may certainly be convenient, but as Badalamenti wrote, it’s time to “stop believing you are supporting your community by ordering from a 3rd party delivery company.”

And in other news...

• Senator Elizabeth Warren will be joining restaurant workers today in an online rally to urge restaurants to provide better worker safety conditions. [F&W]
• Senator Kirsten Gillibrand will also join One Fair Wage today in a virtual Town Hall to “discuss the changes that employers both want to and need to make in order to create a new, better future for workers moving forward.” [NowThisPolitics]
• A pilot effort is underway to allow SNAP beneficiaries to shop online. [NYTimes]
• Rep. David Trone of Maryland owns liquor chain Total Wine & More. It is the country’s largest privately-owned liquor chain, and it recently ended its $2 an hour raise for employees. [Buzzfeed]
• Whole Foods will start giving free masks to shoppers. Also, today Whole Foods workers are on strike to demand better safety protections, as they say Whole Foods has exhibited “lack of transparency and basic safety protections for employees during the COVID-19 pandemic.” [BI]
• Paula Deen has a weekly cooking segment on Fox & Friends. [Twitter]
• Just in time for our canceled summer: Dunkaroos

• All AM Intel Coverage [E]