Facing fury over ‘fake websites,’ Grubhub says restaurants have it wrong | Hacker News Reader

Facing fury over ‘fake websites,’ Grubhub says restaurants have it wrong

latimes.com

68 pointslxm57 comments

> The second item in terms of service signed by restaurant owners states that Grubhub “may create, maintain and operate a microsite (“MS”) and obtain the URL for such MS on restaurant’s behalf.”

I would not have realized that "obtain the URL" meant "purchase a domain name" if I read this.

What else would it mean that would not include the possibility to purchase a domain name for this purpose?

URL ≠ domain. I would assume it meant that there would be a URL under the other company's domain. Not that they would register a new domain with my branding!

Put yourself in someone else's shoes for a moment...

You're a mom and pop restaurant owner. Maybe new to the country. You put all your savings into this. Now you're making your delicious family recipes and people are enjoying them. And paying you! And hopefully coming back for more.

You're barely making ends meet, but you hope the business will grow from word of mouth.

Now a delivery service comes along. You know your margins will be low on those orders after their cut, but hey, it keeps you busy and maybe you can hire another cook.

Pop quiz! What's a "microsite", and what's a "URL"? You may have heard of one of those things, but what is the other? Something from Microsoft?

Nonetheless, you need the business, and you sign up because you have a customer waiting for dinner and you have to get back to cooking.

So you need the business, don't have time to get into the details, have a company that takes care of those details for you, brings you an additional volume of orders that you seek, takes the commission they earned and you agreed to, and turns over the domain upon demand.

It sounds like a nearly ideal business arrangement to me. I'd be far more troubled about the burying of positive reviews for people who refused to pay for advertising than I am for someone living up to the letter (and I believe the spirit) of the agreement with respect to microsites and domain/URLs.

What is a microsite?

https://www.google.com/search?q=microsite

A small website, often targeted to a specific marketing channel or campaign.

Unless the customers would have come to your site directly and maybe visited your restaurant. This smells a lot like affiliate code stuffing that some shady websites and toolbars do.

I agree, I would assume that meant grubhub.com/mybrand or something to that effect.

as a techie and as a restaurant owner, that's pretty much my assumption too. i'm not even sure if i would try to clarify it since i would misunderstand it.

and, speaking from the perspective of having tried to negotiate similar contracts with similar companies - the people you deal with aren't any more knowledgeable than you are. they're mostly there to pressure you to sign asap above all else, and are super unhelpful in renegotiating anything on these contracts. one of them put down the wrong entity name in a contract and couldn't even fix it.

i tend to walk away from them because i'm not suffering for more business with no profit, but most business owners don't feel like they have that luxury...

Yeah, if I was reading that language, I would think it would be more like a "microsite" with a URL of "https://grubhub.com/r/bobspizzaria"; instead it's grubhub buying "bobspizzaria.com" (and maybe variants for all I know). That seems like a bait-and-switch.

To be honest, not a great look from Matt. It's entirely possible that a lot of this was a misunderstanding, since microsites is literally a product feature that GrubHub sales folks use to sell to restaurant owners (among several, several other features that GrubHub provides).

One could imagine that this was mainly a communication error, and it could've been fixed by updating GrubHub's sales processes.

But Matt saying that restaurants have it wrong? It's just... not a smart thing to do. GrubHub has a symbiotic relationship with restaurant owners, and they gain nothing from insulting restaurant owners.

They might have not-insignificant potential revenue losses if they have to remove these micro-sites.

Welp, it appears they have not-insignificant PR backlash from handling this so poorly. If a restaurant owner wants the domain for their website it'd probably be a real PR win for grubhub to just transfer ownership.

The article says they hand over ownership on demand.

Both GrubHub _and_ restaurants, yes.

The restaurants will gain if they take over the microsite and put their own content there because they won't have to pay a fee to GrubHub.

Perhaps! But remember that wouldn't work as well for merchants that use GrubHub Delivery drivers. And many restaurants owners aren't that tech-savvy.

Agreed. Blaming the restaurants is an absolutely horrendous political play. They don't need GrubHub. There are many other operators that fill a similar niche.

Accepting responsibility for the communication error (if we can call it that) is the best way to keep a positive sentiment with restaurant owners.

Blaming the restaurant owners sends a message here -- GrubHub feels they have the upper hand by pointing to the legal language. B2B relationships are not ultimately defined by paperwork, unless grave disputes arise. The relationship is fundamentally is maintaining a good rapport.

I mostly agree w/ you!

> They don't need GrubHub

This part I disagree :-) A lot of restaurants depend on GrubHub for their livelihoods.

If you have a really good product, you'd probably survive without GrubHub. But yes, with the advent of these apps (and the decline of going-to-eat-at-the-restaurant experience), we are seeing the commoditization of what's for dinner. It's a tough place to be, with thin margins. But there still are other platforms.

c'est la vie

GrubHub says that restaurants have it wrong by citing fine print.

Restaurants want first right of refusal over the use of their brand, not default opt-in by a third party buried in legalspeak.

GrubHub is trying to reframe this issue in legalistic terms, to distract from their failure to collect explicit opt-ins from every restaurant they’ve used in this manner.

It’s unfortunate that the headline enables that change in perception by readers.

Correct. GrubHub is typo-squatting, and at best are in some form of trademark violation.

The article says they turned over the domain to the restaurant on their request. Also it sounds like this is not just fine print; they advertise this service as part of their offering to businesses. Finally, if you are running a business, you cannot plead ignorance on the fine print. You need to read contracts that you sign, or pay a professional to do so.

The issue here is not "were they authorized to do this?". They were. The issue here is that their actions indicate that they cannot be trusted.

Do they require the business owner check a box "Yes" or "No" and initial next to the clause where the business owner authorizes GrubHub to operate their brand without further consent? No, they don't. That they do not implies to business owners that they cannot trust GrubHub.

That they refuse to notify business owners when they register a domain using their brand implies to business owners that they cannot trust GrubHub.

That their response summarizes as "you signed a multi-page contract that permitted us to do this without notification to you when we do, stop whining about it" implies to business owners that they cannot trust GrubHub.

This is why they are so desperate to shift the framing of the argument from "GrubHub broke trust" to "GrubHub was legally authorized to act this way". They aren't willing to change their behavior, and so instead they simply try to reframe the news with a press statement.

http://archive.is/iIu9L

Short form: the restaurants didn't read the TOS, and they have been treated with more consideration than that document requires. GrubHub has done nothing wrong, and even went out of its way to do the right thing.

Utilizing a TOS to exploit small businesses in a domain they have little expertise in.

"GrubHub has done nothing wrong", indeed.

Terms of service is the wrong term really. These restaurants signed a contract with another business to receive a service. They didn't read the contract. People running businesses shouldn't be signing contracts without at the very least reading the document carefully. These are absolutely not analagous to Terms of Service and businesses do not enjoy consumer protection laws. These contracts just could just as easily said "Grubhub has the right to offer 10% discounts on weekends" - it wouldn't even be unusual.

Why do you think "terms of service" is the wrong term? The article refers to it as such multiple times.

If a TOS says that they get your firstborn son, but they settle instead for his arm, they aren't some kind of hero.

It's difficult to fathom how "you agreed to worse in the TOS" could be considered synonymous with "consideration" and "doing the right thing". It's frankly surreal to see a person suggest it.

GrubHub has done nothing wrong...

Whether or not this is the case is unrelated to what is permitted by law or contract.

Terrifying how we have people taking the side of a TOS belonging to a shitty gig economy startup over small business owning human beings

If the human beings don't read the contacts they sign, they won't be owning a business for long. If GrubHub put it in writing, and another business didn't bother to figure out what it was signing, I can't see how it's GrubHub's fault.

> If the human beings don't read the contacts they sign, they won't be owning a business for long.

That's bullshit and you know it. They may be naive thinking an internet company like Grub Hub will act decently, but that doesn't make the restaurant operators wrong.

It's too bad software developers and startup people don't have to go through a course on ethics to gain certification like professional engineers do.

I really don't know that's bullshit. Please accept the idea that sometimes people might honestly disagree with you.

You mean it's too bad people aren't forced to feel the same way about issues as you do.

Nah, they mean too bad people are allowed to be abusive.

Using your ability to outSEO your customer to capture the money that would otherwise go to them is abuse.

All GrubHub had to do to make this totally acceptable to all is have the restaurant owners explicitly opt-in before creating a microsite.

Companies are also owned by human beings. I don't see any inherent reason people should take the side of a small business in every dispute between a small business and a larger company.

Go and ask the nearest 10 local-business restaurant owners what the sentence:

> “may create, maintain and operate a microsite (“MS”) and obtain the URL for such MS on restaurant’s behalf.”

means. I can guarantee most of them will have no idea what that means. Even if they knew what a "microsite" was, that could mean so many different things anyways.

And before you say "then they should have asked a lawyer," 1) yes, but there may not be many lawyers who'd know what that meant either, and 2) there's no way restaurant owners could get that removed from the contract, so they'd basically have to sign anyways or remove a source of revenue.

The point being, there's a wide gulf between "it was in the TOS" and "The owners were aware and happy with what was happening"

Here's a crazy idea - they could literally have just e-mailed grubhub asking "Hey, I'm reading through the contract you sent me, could you elaborate on clause X"

Would they have responded? I can't think of a single time when I had any chance to negotiate a TOS.

Besides, even if they changed the onboarding process into an old-style contract negotiation, constantly having to deal with the devil, weeding out his sly contractual tricks, is a cost that can add up in terms of stress and man-hours. Most people would rather just choose business partners that aren't trying to trick them.

We're not talking about negotiating, not at all. You can absoluutely ask them what they mean by a clause and then chose not to sign. I find it kind of funny that people in this comment thread seem to think that Grubhub is something unique as if Uber hasn't been pushing their drivers into poverty for years now. Yes, the terms of the contract are likely to be onerous, that's kind of what these rent-seeking business models are all about.

Do you think that such obtuse terminology was accidental? I promise you it wasn't.

If the business owners didn't understand what they were signing — not misunderstood, but simply couldn't figure it out, as seems most likely here — but they signed it anyway instead of figuring it out or asking an expert, I can't see how they have anyone to blame here but themselves. I'm not even being intentionally contrarian, as I sometimes might; I really can't see why GrubHub is being blamed.

The way of the modern world is that contracts are getting so obscure and hard to parse that I imagine we'll see more cases like this - with courts upholding the objections from the smaller parties because writing a contract that is incomprehensible is a form of negotiating in bad faith.

But this contract isn't incomprehensible, any more than a mortgage contract is - it's just a specialized topic. You can't invalidate every contract whose meaning isn't obvious to a layman; that's why expert advisors are happy to work for your money.

Ignorance isn't a real excuse here, definitely not enough to make me take sides between two businesses.

If you are unable to see a power disparity between a public company and a mom 'n pop restaurant, I don't know how to help.

Power disparity is an element of contract review.

It's not about ignorance. Ambiguous contracts are bad--and risky--for both parties, period. Worse, the relevant section from GrubHub's TOS appears to be written in a manner that purposely maximizes that ambiguity[0] to the company's advantage. That's an issue that people can absolutely take issue with.

Subsection (a) combines two distinct provisions in a really messy way. First, GrubHub agrees to enable its users to order food from its "ordering system/advertising service" on its website, associated app(s), and any of its affiliated web or mobile properties. Second, you have the separate provision stating that GH "may create, maintain and operate" a "microsite." These are distinct, but combining them helps give the impression that they're related.

The agreement doesn't define what a microsite. You could plausibly argue that the restaurant's page on their website qualifies as a microsite. For that matter, it doesn't define what constitutes a URL in this context, and using the term "URL" instead of "domain" seems like a willful effort at obfuscation. "Registering a domain" is a specific act with a common understanding; "obtaining a URL" can mean literally anything, including "registering a domain." They're purposely using a broader term--that they don't define for the contract--in lieu of a more specific one that's also commonly understood.

Finally, GrubHub operates the "microsite...on Restaurant's behalf." Could this create an agency relationship between a principal (the restaurant) and its agent (GrubHub)? What authority is conferred and what duties are owed? Or does the relationship something less? If the relationship is terminated, because GrubHub "[obtained] the URL...on Restaurant's behalf," will the domain name that was registered be transferred to the restaurant? Literally none of this is stated.

If you read the original article[1] about the practice, there's an added wrinkle. GrubHub gets to charge a higher commission on orders originating from their marketing services. If the order is referred via the restaurant's website, the commission is lower. Put simply, it's to GrubHub's benefit, and the restaurant's detriment, to try and promote the "microsite" over the restaurant's real website in search listings (whether they do or not, I don't know; that hasn't been reported on). They also list phone numbers on the microsites that aren't for the restaurant, but instead, for GrubHub's own services. GrubHub gets its commission, rather than being cut out of the loop. One could mount a defense for that (legally; ethically, there are...some issues with it) when it's done in the GrubHub apps; it's a bit stickier of an issue when it's done on a "microsite" masquerading as the restaurant's site and operated "on its behalf." As a side note, they've been sued for charging restaurants for calls that didn't result in orders, but that's a separate, albeit related, issue.

That would appear to go well beyond even the most expansive definition of operating a microsite. Even if you agree in principle to the idea, the poorly worded agreement means that both parties are likely to have very different understandings of what a microsite is and how it will be instituted.

0. https://www.theverge.com/2019/7/2/20680000/grubhub-seamless-...

1. https://newfoodeconomy.org/grubhub-domain-purchases-thousand...

2. https://thetakeout.com/grubhub-lawsuit-restaurants-phone-cal...

Your second point implies that it doesn’t really matter when this function was explained properly.. the outcome would have been the same

If the TOS are unclear. Contacts favour the weaker non-drafting party.

... according to GrubHub

Reply on news.ycombinator.com