People think they're calling restaurants directly but Grubhub is getting a fee

https://www.saddlebackbbq.com/how-google-doordash-grubhub-co...

Or if Doordash puts their phone numbers on the restaurants Google listings, replacing the direct one: https://support.google.com/business/thread/5820393?hl=en

Would you label a sales guy you hired to find you new customers a bad guy if he camped in front of your door, talked to people coming to visit you and claimed commission?

In some places in Eastern Europe, for a while, you could see these people stand in front of empty, free parking spots in the street. As soon as they would see a car approaching they would wave their hands and signal you to park there. To be clear, these people were not afiliated with city hall or other public institutions in any way.

If you drove away, no biggie. If you parked, they would do a big show of moving around the car and telling you when you were too close to the curb, when you should start turning the wheel etc.

Once you were done, they would walk up to you and heavily imply they should be paid for the service they provided ("discovering" the parking space for you and helping you park). You could safely ignore them and they might cuss at you but that was about it.

My girlfriend used to lovingly call them Parking Consultants.

These GH stories have a very similar energy, with middlemen forcefully putting themselves in front of you when you follow a discovery path _that would naturally lead you to the restaurant you were looking for_ (e.g. by showing up higher than the restaurant you're tying to order from in the Google search).

[1] https://www.theverge.com/2019/6/28/19154220/grubhub-seamless...

For example, suppose a fairy told OP about the restaurant and OP then Googled it to get the number. If the grubhub MITM phone number bumped the real number/website further down then grubhub is a nuisance and a thief.

But OP also mentioned they thought they had ordered from the restaurant's web site. If that confusion is due to dark patterns employed by grubhub then grubhub is full of evil wizards who must be overcome in an epic battle.

Only if OP discovered by searching and grubhub bubbling to the top of a search where the restaurant otherwise wouldn't have appeared is grubhub the knight here.

So we need to know-- OP, how did you discover this new restaurant in the first place?

Confusing a deputy that you are indeed someone in order to intermediate a relationship between them and that person has a skeevy air to it. It's the deception, I think.

Yelp adds value by putting my competitors above me when people search my exact name. They then offer me the deal Google gets.

GrubHub is spending VC money to win the google auction and then they offer the restaurant the great deal of handing over the profit margin to them. They’ll continue elbowing out paying restaurants after that to keep the money flowing, so the restaurant is paying for the privilege of paying GrubHub.

What a great time for small business.

Suppose you want to go to McDonald's. I buy the McDonald's domain name. I put a credit card form on my site, and I "deliver" McDonald's to you. I charge a $40 surcharge for the privilege.

There is no way in hell that McDonald's would have to go begging at realmcdonald's.com because of my shenanigans. They'd have no patience for this bullshit. In real life they'd sicc a DMCA notice and a ton of lawyers on this and I'd lose my webhost and the sheriff would come visit me and who knows what else. They'd get McDonald's.com fast enough to make your head spin, and I'd be pushed out of that business.

Why is it different for restaurants?

Same problem: instead of me it's a company, and instead of McDonald's it's a small restaurant. But the principle is the same.

In domain name hijacking, it's presumed wrong because customers think they're reaching McDonald's when they're really calling me. In the GrubHub case it's exactly the same thing.

I don't understand why it's wrong when I do it, but it's not a problem GrubHub does. After all, McDonald's doesn't deliver, and I may own a very fine delivery business, but I'm still not allowed to coast off their name for my own business.

That's a pretty broad brush you're using. All the restaurants in my area that I frequent don't need any help. I've ordered from them all over the phone or online through their website and haven't run into a problem that some SV 3rd party would have or could have solved. Any "improvements in experience" by yelp/grubhub is pure grift.

Is keeping this stuff up to date actually difficult. I don't run a business, so I have no idea.

What we really need is for someone to build an open source / one time cost / subscription platform that gives restaurants the ease of using a premade system without the expense of having a per transaction fee.

No stupid app to download. No account to create. No bullshit fees. No marketing emails. I just tell them what I want and then go get it. It's refreshing.

And even though your points are right, I am not sure those providers should charge as much. It's killing the golden goose in the long term, especially now.

You still use Yelp after all we know about them?

A simple search on just about any maps app gives a direct contact info, have you tried that?

Give the card over the phone is arguably more or as secure as online.

They read the order back to you don't they?

They are trying to compete, call them directly and cut out all these middle men.

I do notice in my area (Paris, France) that many small restaurants hardly have an online presence. I understand some people don't like calling up restaurants to order (I sometimes am one of those people).

Indeed, in such cases, having some sort of external service aggregating information and maybe even exposing some sort of common ordering platform would be great.

However, I think that people have an issue with GrubHub (and/or others) impersonating the restaurants. They don't come out and say "Hello, this is GH, we'll connect you to XYZ". They make you think you're doing business directly with the restaurant when, in fact, they're covertly routing the order through their platform and extracting fees.

For me the actual issue is their not being open about it. I don't often go to restaurants and I don't know people working there either, but I would think that offering such a service in an open manner would be welcomed by both businesses and clients.

Curious reversion to what I want for everything. I don't want to do it online, I want to call for anything. Less online presence = good, in my books. Less to build profiles with.

(posted in public on HN by accident of course)

If this was true Grubhub would gladly put there name on everything, say it in the automated phone call, so people would actively seek them out for a better experience.

Yelp is another matter full of fake reviews and spam - I can also see why restaurants don't want to have a "social media manager" doing that for them.

I mean, you're using smart vocabulary "due dilligence", "Yelp" - but how much of that is literally spammy articles that have nothing to do with the real quality of the food in the restaurant?

I wonder if ordering by video call would make it feel more like in person ordering?

Restaurants are typically swamped in the massive overhead of running an actual restaurant, and are not fully up to date with every latest bit of marketing toolkit.

Because they are not fully up to date on the latest digital marketing, you think it is justified that they be subject to what is effectively hoards of VC-backed extortionists - nice restaruant you got there... be a shame if some bad reviews got highlighted ... or here, we'll just hijack your phone listings and take care of delivery for you...

At least the mafiosi would occasionally eat at the restaurants on whom they were running protection rackets...

The Due diligence is required because of these new hordes of extortionists, not the restaurants (and no, it isn't all about your trivial convenience, OMG, they want you to call and don't have the latest web technology up for every function... nevermind the quality of the food, ambiance, or service, it's all about whether you can order it through an app, isn't it?)

sheesh

There's the significant chance that most of the restaurants you have to call are running at such thin profit margins that they don't have the money to spare to hire web devs or pay hosting providers, and even if they did, do you want to hand over your credit card details to some budget build order page?

It's also likely that the profit margins are low enough that the fees for something like Grubhub cut deep.

On the flip side, having to call somewhere really isn't that hard, and to describe it as "a terrible experience" is a bit mystifying.

> needing to give my credit card over the phone

Pay in cash?

> not knowing how long the order will take

You don't need a computer to tell you this, just say "How long will the order take?" to the person on the phone and they will tell you.

> needing to be concerned about the person hearing the order right

Ask for a read-back.

Maybe it was a $5,000 order for the whole office!

Or maybe it was a $50 at-home binge.

The entire time -- they are trying to book you full price. The hotel loses, because they cannot give you discounts -- they either get the sale or lose it alltogether.

It doesn't surprise me they are getting exploited with the overwhelming mountain of stuff they need to manage. The small margins mean it's very hard to hire staff to distribute work too.

- if you buy or start a grocery store, you know you're buying yourself a job; you won't get rich, but you will make more money than you would working for someone else, e.g. if your options are limited due to discrimination, lack of fluency with local language, literacy etc.

- if you open a restaurant, you might me doing it for all the same reasons as above (think an undifferentiated Chinese restaurants, or a local pizza place). But many people open restaurants because they are into food, because they think the way they make food is better than existing restaurants, and because they think the margins are going to make the restaurant ultra-profitable.

(My parents also had a grocery store.)

Sorry to hijack off of your comment - none of what I say is meant as a negative about you or your parents.

I've seen two types of people start these:

1. People from low income backgrounds who don't have many other options and don't have the means to gain good knowledge. I sympathize with them.

2. People who are somewhat wealthier (have a good degree, work for an engineering company, etc) who complain about how poorly people are running restaurants and how poor the food is and know for certain that they can run a restaurant that makes the food really well and everyone will come to their restaurant and business will be good. Very common for this to be about ethnic restaurants but doesn't need to be.

I have little sympathy for this group. They really should know better. I've talked to them about it before they put a huge chunk of their savings into starting a restaurant. They typically do no background research. They don't ask other business owners. They have no idea about the margins (hint - the other restaurants who make food poorly do it for an economic reason - not because they can't find good chefs).

Recently one of them opened a restaurant near my home. And their food was great - I would put it in the top 2 of their category in the city. But their prices were too high. Normally I order this type of food once in a while when I don't want to cook or am busy. But the price was beyond that threshold. I went there only when special friends visited me in town and took them there.

And not many people went there. The reviews everywhere (Yelp, etc) were awesome. But people didn't go there. Partly because of prices, but partly because of the location. Why did they pick that location? Because there's a big company in the neighborhood. Surely there are plenty of well paid people there who would come for lunch? Yes there are and no they won't. Over the years living there I know this plaza well. It's a graveyard for restaurants - most of them likely relying on employees of that company eating there. All these guys had to do was spend time in the restaurants in that plaza prior to signing the lease to get an idea. "Ah, but they don't go to those restaurants because their food is crap!" Yes, the food is crap. No, that's not the reason.

And then there's the food. Great food they made. But they weren't making a profit. So did they revise their menu to focus on items that would give good margins? No. They raised the prices. Fewer people came. They raised the prices again. Even fewer people came. This spiraled out of control. Within a year they had shut down. One of the co-owners told me there wasn't a month where they made a profit. I asked "Did you talk to any restaurant owners for their advice prior to opening?" Nope. If the food is great, people will come.

These guys work (or worked) pretty good jobs prior to opening the business - sometimes in senior management roles. Is that how decisions were made at their companies?

Yes and no. There are landowners with a lot of wealth. The majority of landowners have less wealth (and will always have less wealth) than a typical FAANG engineer.

I started looking heavily into real estate last year and got to meet many of these people. The average commercial plaza in most cities? Not owned by a wealthy person - and indeed some of the business owners on the plaza are wealthier. A lot of these owners don't make enough out of it to make a living and still have a full time job.

They do it because it's passive income - almost no effort. Plaza owners typically don't pay for any maintenance. They don't pay property taxes. All this is passed on to the businesses in exchange for relatively low rents. As long as he collects enough rent to pay the loan, and has some extra left over, he's happy. It's free money.

(And 90-99% of land owners don't own the property free and clear. The majority of them owe more than half the value to some bank or other. That should tell you who really is making the money).

I suspect Efficiency is Everything is measuring a very different thing. They seem to focus on calories per dollar, which is not how restaurants or home cooks typically think.

The rule of thumb used in the restaurant industry is 30/30/30/10. 30% for food, labour, rent, and 10% margin. Anecdotally, for dinner I spend about £3 a meal to cook at home, and could probably buy that meal out for £8-12.

As Efficiency is Everything says, you can live on $1.50 a day, but it requires using only a very limited subset of ingredients and allows little room for preference. For some people this makes no difference, for most it's a huge handicap, which is why it's limited to the min-maxing fringes.

Food is a large source of enjoyment for a lot of people, even removing the social benefits of in-person restaurants, I don't think it is a waste. Although certainly many restaurant owners would benefit from some business training.

I also think you'll find you could say the same thing about a lot of life chores- people pay other people to sew? People pay other people to mow their lawn? People pay other people to trim their hair? And so on. A lot of these things could be done sufficiently yourself, but 1) they will generally be done better by the professional and 2) as these things pile up the total time spent will become a legitimate burden.

I found it interesting to read about the daily schedules of housewives back in the 50s or so, some of their tasks could be automated now or would be considered unnecessary, but even adjusting to be a bit more modern it sounded like a difficult full time job. And there are increasingly less people "employed" in this sector. So I don't know why I see so many objections to outsourcing something like cooking (not even all the time).

The argument isn’t so much “grubhub charges a fee” more that “grubhub uses its monopoly position in a local market to further monopolize distribution channels and thus charge monopoly prices“

“In the contract” implies the restaurants are opting to work with Grubhub and pay them fees.

As for “non-partner” listings, how can Grubhub charge a fee if the order is phoned in or payed over the counter like a normal order? So I don’t think that situation is one where restaurants are paying Grubhub any fees (though Grubhub is surely charging customers fees and possibly marking up menu items, the latter of which I agree is shady and should be stopped.)

I am happy to be mad at Grubhub but I’m not condemning them for charging a restaurant a fee the restaurant agreed in writing to pay. Why did the coffee shop in TFA agree to pay $6.76 or whatever per call??

I would argue that they are also the owner of many of the customers. DoorDash owns me as a customer simply because when I am hungry, I turn on the app and select from one of the offerings.

https://www.eater.com/2019/6/28/19171476/grubhub-seamless-cy...