Grubhub sued for listing restaurants without permission
axios.com
axios.com
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?
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.
https://www.theguardian.com/business/2019/feb/06/hotel-booki...
Years ago, I had used hotels.com to book a reservation. I had booked a hotel near the destination airport for one night before continuing to travel to my actual destination. The hotel advertised that they can give refunds or change booking with 24 hours notice.
My flight was cancelled and rescheduled for the next day, making that one-night hotel stay a waste if I couldn't reschedule or get a refund for it.
Apparently hotels.com doesn't have the same policy as the hotel I had a reservation at, so while still in the airport, I had to argue with about 3 layers of people before it was made apparent that I wasn't speaking to the hotel.
In the end, hotels.com "made an exception" for me and refunded my money which I was then able to use to book another night. I suspect that exception was made because they were able to get a refund from the hotel itself.
During this period I staid at hotels quite often, and learned that the best way to get a good and cheap booking is to E-mail the hotel directly. The cheap part came from being an enterprise organisation, but as far as secure and easy booking goes I always email hotels directly for private stays as well. Maybe it’ll cost me a few extra dollars, but I avoid the hassle of having to deal with hotels.com who among other things charge you up front and make it almost impossible to cancel.
I google "Fairmont Hotel Berkeley" because that is what my co-workers are staying at. I get an 800 number, which I call. The person is friendly and asks "Can I help you book a room at Fairmont Berkeley?" Business customers, especially, are somewhat price insensitive since they are not paying for trips.
Sad world.
They are misrepresenting things, and asking about a discount code probably should get you forwarded to the hotel (or their corporate call center). It can get a little hairy when Hotels.com (or whoever) has a lower price or more rooms available than the hotel directly (sometimes the Online Travel Agencies will commit to a number of rooms over a time frame, then they have pricing autonomy and exclusive availability; probably not happening in covid times though)
If you dig up the support number it is going to the hotels.com call center. It's not deceptive because they have your booking and your money, they can see your order and rebook you in another hotel which the direct hotel wouldn't be able to do (this happens regularly when there are problems like the hotel has no room).
If you have a corporate discount with a specific hotel you definitely need to deal with the website of the hotel directly, not hotels.com
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.
If Grubhub actually took a stand and showed they not only did not do this sort of behavior, I would actually use it, and I would pay the premium for delivery (to make sure the restaurant makes money and the driver makes money).
Instead, I never use your service, and I never plan to. I go out of my way to call a restaurant (and because of shady behavior like that, I take the extra time to make sure it is that restaurant and not some call center) and I will physically go to a restaurant because to pick up my order, so I know they are not losing money on orders.
You may well faithfully adhere to this promise, but the reality is, most people simply don't know (and it would be generous for me to assume they would care even if they DID know).
So much of the GH/DD/UE model is reducing friction to drive transactions. Click button, throw some amount of money at the company, receive product. Just like Amazon.
Having to stay abreast of the news, the competitive landscape, the various companies' business practices, and then factor that all in when making an online transaction, is probably too much to ask of a consumer when the entire point of the service is not having to know or care too much about the details.
You could even argue one of the features of these services is abstracting away things that people don't WANT to know about- Tipping policies, labor practices, what the parking is like at the restaurant, how pleasant the staff is to deal with, how the owner's doing today, etc.
I'm with you- I almost never order anything delivery, I pick up my own orders on the rare occasion I takeout, etc. This whole delivery gig economy thing makes me pretty uncomfortable. But we're a rare breed. (and I'm not claiming to be better than most people; I order far too much from Amazon than I'd like to admit).
However, in truth they pay damage in reputation. If the delivery company delivers food slow, or lets it get cold, then the customer will blame the restaurant. On top of that, unpartnered restaurants will naturally get slower delivery times because the order flow involves grubhub delivery people walking in and placing an order (or calling in), whereas partnered restaurants get point of sale systems integrated with grubhub's backend. They get less accurate delivery time estimations. They might pay a much higher delivery fee or service fee. All things add up to a worse customer experience.
[a]: I.E. non-Prime purchases (ignoring the fact that Prime purchases can also just be late)
Some background reading: https://themargins.substack.com/p/doordash-and-pizza-arbitra...
Be sure to also read this insightful comment left by a former GrubHub employee: https://themargins.substack.com/p/doordash-and-pizza-arbitra...
That's why this is fraud.
> For restaurant inventory, we will rapidly expand our recent pilots of putting non-partnered restaurants on the platform. For reasons we’ve discussed many times, we believe non-partnered options are the wrong long-term answer for diners, restaurants and shareholders. It is expensive for everyone, a suboptimal diner experience and rife with operational challenges. With that said, it is extremely efficient and cheap to add non-partnered inventory to our platform and it can at least ensure that all of our current and potential new diners have the option to order from any of their favorite restaurants now, even if it’s not the best solution. By leveraging non-partnered options, we believe we can more than double the number of restaurants on our platform by the end of 2020.
> At the same time, because we know that partnered relationships are critical to the long-term success of this business, we will be investing aggressively in our independent restaurant sales organization to support converting as many of these non-partnered restaurants to partnered relationships as quickly as possible and to take advantage of other innovations in the restaurant space, like virtual restaurants.
https://s2.q4cdn.com/772508021/files/doc_financials/2019/q3/...
If the driver places the order without making it clear to the restauranteur that they are the middleman company (UberEats, Doordash, etc.) then the opt-out clause is meaningless. You can't opt out of something you're never aware of.
By using their name in commerce, restaurants have a trademark.
People complaining to the restaurant about delivery shows that consumers mistook the Place & Pay vendor for the restaurant. This is proof that the trademark was infringed.
I don't see how Place & Pay could survive a court case, or even prolong one.
Fixed that for you.
I was at the bar of a local restaurant when some delivery driver (not sure if GH) came in to pick up an order. The (super busy) server said "we told you we don't want to participate in this...", clearly exasperated at this happening over and over. This is a restaurant that does a lot of catering, where they set the terms/fees.
The driver started trying to "explain" how it's just the same as if he were a real customer and how would she know, etc. It was just gross.
This was a couple years ago.
Even if someone does eventually notice and takes corrective action, this is far from an optimal way to do it. Given that the server is acting like the drivers should just know that they wanted to be unlisted, it wouldn't surprise me if the "we told you before" means all they did was tell drivers they wanted to opt out and never actually did the opt out procedure.
I also never said that it is a good way to accomplish this. I'm just pointing out that refusing the driver can be a way to get them to leave.
It "competes" with any delivery service a restaurant runs, but if the restaurant offers takeout at all, it's hard for me to see why the market should care who is doing the taking out.
Last month the grilled chicken place gave me chicken which wasn't grilled. I called them (they have a national call centre), and the store manager called me shortly after, to apologise. Following day they sent me chicken.
Last week I was at a pizza place at night. An angry customer called, they got the other wrong. I listened to the store manager for about 4-6 minutes trying to explain that this was the 3rd-party service that got it wrong.
That service doesn't have an agreement with the store/chain, as they have their own delivery service.
Is the extra admin worth it? I don't think so. It's unethical behaviour from the tech companies.
Grubhub pointed the finger at the local restaurant, and the local restaurant pointed the finger at GH for not specifying the level of spiciness. In the end the only way to resolve the problem was to do a chargeback because neither merchant would take responsibility. We didn't have the business relationship with the restaurant. So I'll never use GH for anything because when something goes wrong they absolve themselves of responsibility.
And I'm skeptical of any other company that acts as a base middleman like they do.
I assume that hurt GH?
The service itself isn't illegal, but impersonating the restaurant is.
It’s not at all my issue if my client is frustrated at Microcenter because of the delay and it’s not my job to protect their reputation so long as I’m truthful.
If my order is delayed because the driver is stuck at the restaurant waiting for my order because the restaurant hadn’t stated yet then that’s on them. Had I driven there myself I would be just as annoyed.
If my order is delayed because they can’t find a driver or there’s a problem with the ordering then that’s on the delivery company.
The issue isn't when a restaurant drags their feet with an order, it's when they don't know the order even exists until the courier shows up. So not only do you have to play a game of telephone with your delivery driver placing your order, but that order is only paid for & made once that driver get there.
None of this is clear from the apps I've used. There's no indication whether you're ordering from a restaurant that has a backend receiving orders in realtime or if it's a "place and pay" order. Customers will reasonably think the restaurant is to blame, when it could've very well been the fault of the driver.
it says I'm ordering from the restaurant.
it is lying to the customer by misrepresenting the price and performacne of the restaurant. When GH messes up, the implications are rarely for GH, they are for the restaurant which gets a bad review by the customer.
If the driver is going to do multiple orders at once, I should be informed of this.
If they can hinge a case on whether the reasonable person can tell the difference, there's meat on the bones, but I don't see this case ending with Grubhub's business model being declared illegal (only with clarifications as to how to maintain the reputation protection aspect of trademark against the nominative fair use aspect of trademark).
I would never make a bet on peoples inability to be idiots.
As for actual fast food, while the process is optimized to the extent possible, that optimization usually involves the restaurants having their own supply chain of specific ingredients. Grubhub would have to gain access to the same ingredients to successfully impersonate chain restaurants.
What I can see them doing is just launching 100 different fast food brands selling the same food cooked in the same dark megakitchen, because why not, DDoSing consumer choice with fake brands is par for the course these days.
Some pizza is not fast food.
Market participants all care for different reasons.
As far as assuming the business identities of "non participating" restaurants, that sort of thing has a long history - it is a favorite of various organized crime rings.
So in that sense, it does seem a natural fit for GH.
[1] https://www.businessinsider.com/diners-discover-that-pasqual...
Except you know what your are doing. It isn't clear GH customers do.
Thank you!
https://news.ycombinator.com/item?id=23216852
https://themargins.substack.com/p/doordash-and-pizza-arbitra...
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".
But there seems to clearly be something like fraud going on, and the involuntary nature of restaurants perceived to be participating is... weird.
Slice does something similar. They set up fraudulent websites for local pizzerias, so they can direct people to order through their app:
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?
Doesn't matter if you end of providing the exact same service.
What if I picked up calls going to Apple and all I did was transfer you to the correct person. You are still getting the same service if you called Apple directly but its not legal because Apple did not give me permission to impersonate them.
Or what if a private entity picked up your call to 911?
You're missing the part about how GrubHub, et. al don't just pass you along, they charge 12-30% "commission" just for forwarding the call -- and they set up the fake number just so they could do so.
IIUC, Affiliate marketing is when an online retailer pays you a commission for traffic or sales generated from your referrals.
That's not fraud or misrepresentation.
In the case of Grubhub, et. al, fake phone numbers, they aren't recommending a restaurant. They are claiming that the phone number is the restaurant. Those who call that number aren't clicking an ad because the "affiliate" promoted it. They are calling that number because they'd already decided to contact that particular restaurant, but were redirected to another entity -- with a monetary interest that harms the restaurant -- that doesn't disclose their third-party status.
And that's certainly at least unethical, if not outright fraud.
Charge them for what? When a customer uses the GrubHub site/app to place an order, they are explicitly choosing Grubhub to service that order.
If I choose to call a restaurant rather than use the GrubHub site/app, I'm explicitly choosing to deal with the restaurant directly. As such, GrubHub isn't entitled to an "affiliate referral" fee.
When a website and/or phone number claims to be an entity that it is not, and does not disclose that fact to the customer, then charges a fee based on that deception, that's fraud.
No. You're searching DDG or Google or Bing and a website for the restaurant comes up.
It says it's the restaurant. It has the menu and the phone number. But it's not the actual phone number of the restaurant. Nor is the website set up or endorsed by the restaurant.
Both are owned and controlled by a third party (in this case, GrubHub) which claims to be the restaurant, and by virtue of SEO-spamming the site to the top of the search results, you get that site instead of that of the actual restaurant.
I'm trying to decide whether or not you're ignorant or just being deliberately obtuse. Care to settle the controversy?
The calls are forwarded so that Grubhub knows about them (and can get commission), but the customer that still talks to the actual restaurant.
* That place is expensive (GrubHub sets the price which can be higher than the restaurant) * That place screwed up my order (GrubHub's game of telephone made an error) * That place is so slow (The now multi-step transaction slowed down the process)
>> They're saying you'll get food from restaurant X.
They're actually failing to say this, so the reasonable interpretation is "We ARE restaurant X" which is the fraudulent representation at the heart of the case here.
YOu can end up getting poorly delivered cold food from GrubHub and make restaurant X look bad.
Restaurant X might end up having a load of disappointed customers, reduced custom and have no idea why. They dont know there is actually now a middle man they didn't agree to between them and their customer.
I can sell a Mac but can't hold myself out as a representative of Apple.
When it’s Apple suddenly everyone argues the opposite!
Second, I think the impersonation is the biggest issue. At a minimum, that sounds like trademark infringement; at maximum, that sounds fradulent.
IANAL and am just a dog on the internet, so grains of salt the size of Jupiter. But I don't think the comparison to non-prepared food industries are at all relevant.
That's not what they're saying. They're saying that you're contacting the restaurant, which you're not.
It's at the very least a trademark violation, this is exactly what trademarks were set up to prevent.
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 problem is that Grubhub is not asking permission to list the business on their site and it borders on abusive behavior. The said business may have an ordering system already or a phone number to order because they simply don't to share a hefty cut with Grubhub. Why they don't simply ask for permission? Because some restaurants wouldn't give it and Grubhub forces their hand. I think this is what this lawsuit is about.
But nothing says they have to as far as I know? Do you have to ask permission from an author before you resell a book you own?
> because they simply don't to share a hefty cut with Grubhub
They don't have to share a cut in this case. The restaurant still gets the full retail price that they set. Grubhub marks up on top of that or takes it as a loss as I understand.
> Why they don't simply ask for permission?
They don't want to. Do they need any more reason than that?
This is business, which has many rules. Its not just 'do whatever you like as long as it makes money'.
Except they don't. In fact, they register domain names and set fake websites that say they are the restaurant when they're not. They set up phone numbers that route through Grubhub/Seamless and charge their outrageous commissions even for pickup orders.
While there are many places where delivery services are useful, in places where delivery was already ubiquitous (e.g., NYC), the high commission fees and deceptive practices have forced many low and mid-priced restaurants to close because orders through these services take all their profit and a bunch more, making businesses that had been profitable for years or even decades unprofitable and forcing them to close their doors.
Aside from reducing the number and diversity of restaurants, sucking profit out of such transactions that are way beyond any value provided will also end up costing consumers (that's you) more too.
cf: https://www.theverge.com/2019/6/28/19154220/grubhub-seamless... https://www.theverge.com/2020/5/15/21260609/grubhub-phone-ca... https://www.eater.com/2019/8/6/20756799/yelp-grubhub-phone-n...
Here's an example. The site linked (menupages.com) is owned by Grubhub/Seamless. The telephone number is not the actual phone number of the restaurant, and attempting to order through this site gives no hint that you're using Grubhub/Seamless.
https://menupages.com/tropical-sensation/953-amsterdam-st-ne...
While search engines seem to have backed off putting GrubHub's fake websites near the top of searches, this has been a widespread practice by them for a long time[0]:
"The company has registered a lot of fake websites. GrubHub has registered either a bit more than 23,000 websites, according to the New Food Economy, or 34,000 over the last nine years, per the New York Post’s report. The last domain GrubHub registered was in May, when the Post detailed the company’s practice of creating phone numbers for restaurants in order to drive up its own sales."
[0] https://www.grubstreet.com/2019/07/everything-you-need-to-kn...
That's not necessarily true (yet), that's literally what this legal case is about.
No it is not the same, because there is no business agreement between Grubhub and the restaurant here unwilling and unaware restaurants aren't "kitchens" working for Grubhub.
Grubhub wouldn't dare pulling that stunt with McDonalds or BurgerKing and list their products, use their corporate identity and sandwich pictures without an agreement or striking a deal before hand.
They are preying on smaller restaurants because they know it's harder for the little guy to fight back, it's the very definition of predatory behaviour. You just don't see anything wrong with that.
You don’t need an agreement to resell product that you have purchased.
Or is everyone on HN now suddenly in favour of scrapping the first sale doctrine and allowing manufacturers to control if you can resell your property?
Madness. If GrubHub are able to buy the product they should be able to resell it.
You are ignoring 80% of my argumentations to make your sophistic point, and then complaining "about everyone on HN", you're just being disingenuous.
We're talking about prepared food here (and potentially fraud), not books. And you talk to me about "first sale doctrine" in relation to prepared food claiming everybody here is ignorant?
However they should be very clear that this is what they are doing, and that issues with the food are now their responsibility.
We wouldn't be having this conversation if GH/Uber/etc. were clearly advertising "Call us at xxx-xxx-xxxx, we'll order takeout for you and deliver it".
If they pick up the phone when you call and say "This is grubhub, how can we help you?" we'd be in different territory.
As soon as you make it ambiguous about who you are ordering from, this is an issue of misrepresentation. Even if it does apply, first sale doctrine is a red herring.
Lots of people have already explained this to you on many different comment threads in many different ways.
Businesses operate in the public sphere; they have physical addresses and show up in business listings, so their locations and info aren't private. The use of the logo for commercial purposes could be a concern; I could see an argument perhaps saying that the businesses should have more control over their trademarked property in the sense that there could be confusion of whether they're working with Grubhub (they're certainly not endorsing Grubhub).
But apart from that, use of the business's information (including name) to describe what restaurants Grubhub will pick up from is nominative fair use. If I make a list of "businesses in my home town," McDonald's can't use trademark law to keep their name off my list. Same deal here.
If there are any issues with the order, I guarantee that GH does a quick dash for the door, leaving the restaurant holding the bag. The problem may have occurred anyway, but the customer was actually GH, not the person who called GH.
GH made a sale, got a commission, then didn't have to stand behind their sale.
It may not be illegal, but it is not-nice.
Now remember that GrubHub is doing this to make money, so I’ll take 30% off of all receipts before I kick the actual work over to you.
Oh, and GrubHub and UberEats like to do this to see which markets are the most profitable so I’ll be using your customer’s questions and orders as the basis for the ghost shop which will be undercutting you.
• 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...
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.
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...
GH is pretending to be the restaurant, so you get mad at the restaurant, not GH, when your order arrives late/cold/wrong. The restaurant didn't agree to this representation and you, the customer, weren't informed of it either.
an individual is free to hire someone to go and pick up food from a restaurant on their behalf
But yes, in principle they can get into trouble for using trademarks and logos without authorization (menus are fair game), although I suppose it is fair use to mention the names of the restaurants they can pick up food from. Going after them for that shows that they are not doing anything unlawful by running their intermediary service if this is the only thing the restaurants hope might stick.
My counterpoint is that I don't believe that there is anything wrong with that or that permission is needed. Of course as long as there is no misrepresentation, which may indeed be an issue here.
If you think otherwise I'm happy to hear your argument...
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...
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.
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?
EDIT: this was more in reaction to "still waiting on those Equifax checks" comment. Just give it another 10 years...
not for the firms that bring them: millions in fees & billing, ranging from the upfront certification efforts (riskier) to the payment & settlement (at this stage, risk-free and very lucrative)
----
That’s because the purpose of “class action” lawsuits isn’t to provide relief to the harmed class (despite what many think). It’s to punish the company (financially) for their wrongdoing. It doesn’t always work out that way,[a] but that’s the idea.
The reason (supposedly) for not getting relief is that the injured class members can still file their own cases against the company with their own lawyers. But then you need to pay out-of-pocket for that lawyer and hope the judge not only sides with you, but awards cost in addition to the claimed damages.
Of course, there’s always the perverse incentive of the lawyers working for the class to take a bigger cut for themselves (“why would I take a $5 million payday when I could get $15 million instead?”). There’s also a push to settle because then they work less, but still get their payday.
[a]: Especially if the payout is less than they made harming the class
https://arstechnica.com/science/2020/10/sacklers-who-made-11...
The 235 Million in personal civil liabilities PLUS their losses from owning so much of the company.
https://www.justice.gov/opa/pr/justice-department-announces-...
> 8 billion payout on 11 billion profit. That seems reasonable. Not all of the people using their drugs were being prescribed without good reason. > Purdue Pharma has agreed to plead guilty in federal court in New Jersey to a three-count felony information charging it with one count of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute. The criminal resolution includes the largest penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture. For the $2 billion forfeiture, the company will pay $225 million on the effective date of the bankruptcy, and, as further explained below, the department is willing to credit the value conferred by the company to State and local governments under the department’s anti-piling on and coordination policy. Purdue has also agreed to a civil settlement in the amount of $2.8 billion to resolve its civil liability under the False Claims Act. Separately, the Sackler family has agreed to pay $225 million in damages to resolve its civil False Claims Act liability.
The DOJ delivered a slap on the wrist just in time for the election so that they could claim a win on the opioid crisis.
I don't blame people in this thread for having zero confidence whatsoever in the "justice" system.
Is it okay to profit from the other people they've helped?
In any case Rhodes Pharmaceutical was started in 2007 by the Purdue family. It makes opioids too and should be shut down.
That said, I think you're arguing that if Purdue Pharma were to continue pushing opioids and the Sacklers continued to profit handsomely, that would be equivalent to them stopping now? Stopping them now isn't any sort of win?
It's much, much worse than that. many of those restaurants thrived for years on 5-10% profit margins. Grubhub comes along and charges them 12-30% "commissions" just for forwarding orders and processing credit cards.
Forget about paying a lawyer -- many of these restaurants are out of business because of this.
The mechanism is the ubiquity of folks using "apps" instead of contacting restaurants directly.
It used to be in NYC that every time a restaurant made a delivery, they'd leave paper menus for the residents.
Now, you either go through an "app" (read: an inferior interface to a website) or a search engine to find restaurants.
Aside from the fact that a low/mid-priced restaurant likely doesn't have the tech expertise to set up an online ordering platform, or the financial resources to purchase a point-of-sale system that includes such functionality or to contract with a developer/hosting provider to do so, getting on these sites may seem to be the only way they can maintain their business.
And since GrubHub, et. al use SEO spam to get themselves at the top of search listings, have contracts that forbid restaurants from charging less if orders don't use them, and then take all the profit (and then some) from the bulk of transactions, the deck is stacked against such restaurants.
I suppose you could argue that if a restaurant can't compete in the market, it should fail. And most do. The average lifespan of a restaurant is just five years, and the vast majority fail within one year[0].
But those aren't the restaurants I'm talking about. I'm talking about neighborhood institutions that have been open for decades being forced to close because all their profit and then some is being taken by services like GrubHub that aren't even providing delivery services, just listing on their site (which runs from ~12-30% on every single order).
The insertion of the middle man here, taking up to a third of the revenue on every single order which provides just a listing service (they actually charge the customer for delivery service if the restaurant doesn't provide it -- not the norm here in NYC), has put many wonderful restaurants out of business.
This increases prices, reduces the diversity and choice of cuisine and quality, without providing any value, except in listings and credit card processing.
[0] https://www.usatoday.com/story/money/restaurants/2018/08/09/...
Well, I don't know any either, but if there's a good solid case then it only takes one.
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.
The obtuseness in these comments is really something else.
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.
it really is horrible how screwed up our civil court system is.
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.
So the claim is less a middle man saying "We'll deliver you food from Lou's Diner", and more putting out ads for Lou's Diner with their own phone number in and delivering from Lou's Diner
https://www.instagram.com/p/CGpUGbuAc-q/?igshid=1u5yor18vch0...
> 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!
> 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 the restaurant has chosen to focus on dine in service because that generates the much of their revenue (alcohol sales, desserts, etc.), it would be a shame if their ratings were damaged by delivery customers. People check ratings/reviews before dining out, so having a bunch of bad reviews due to unwanted delivery could really affect dine in traffic as well. It's not fair to expect the restaurant to cater to these delivery customers when they not actually chosen to run a delivery service.
The original comment stands. If a substantial portion of people are ordering takeout from intermediaries, it's reasonable that when one of those customers checks the reviews, they contain relevant info from others who've ordered the same way and shared their thoughts. Getting in a huff because of that is akin to trying to silence people talking about you because you don't like what those people are saying and/or how other people are responding to it.
If review sites are unfairly mixing irrelevant info (presenting takeout experience using intermediaries to customers who are looking exclusively to dine in), then the ire should be aimed at those sites and, ultimately, the dine-in customers who let irrelevant info dissuade them from going through with their order.
Instead, I order takeout. I call the restaurant directly, with their actual number and not some phishing line from a delivery service, and place an order. I immediately leave, and travel the 5-15 mins to the restaurant. By the time I arrive, the food had been finished just moments before, and I travel back home and enjoy my piping hot food. All told the process takes me half the time or less and the food is in perfect condition.
That's the cost of delivery. You can pay to cover the cost of fast deliver with short wait times and get hot food, or you can pay a lesser amount on a gamble that it ends in a long wait and cold food, or you can pay with your time and do it yourself. The balance has never been in favor of the general availability of delivery (with the exception of maybe places like NYC). It's surprising that it's popular at all, really.
I was recently lamenting that I haven't had some favorite items from Trader Joe's in a while, because I've been using grocery delivery during the pandemic and TJ's refuses to partner with Instacart or provide their own delivery. I then came across Dumpling, a sort-of Instacart competitor where you connect with an individual who does the shopping/delivery for you, but they aren't limited to "officially supported" stores. I have no problem with this, and neither should Trader Joe's. It's simply an individual buying food from them and dropping it off somewhere.
Overriding the restaurant's contact info is sketchy. The food may not travel well, but some restaurants refuse to do takeout (either entirely or for certain dishes). But the basic act of paying a service to pick up something on your behalf isn't problematic to me. The restaurant shouldn't care if I pick up my order, or my wife picks up my order, or GrubHub picks up my order.
Because a lot of people are not capable of differentiating between product and delivery, and poor delivery (which they have no control over in this case) shouldn't result in low ratings. Have you ever looked at Amazon reviews? A good chunk of them seems to purely give their stars based on delivery.
I agree, but GrubHub was marketing as if they were the restaurant. If it was clearly marked as "grub hub pickup for third-party restaurants" people would be more aware that GrubHub is responsible for choosing to deliver a restaurant that isn't interested in partnering to allow delivery.
But perhaps that would have led to a much lower CR on the site. Who knows.
https://www.theverge.com/2020/1/29/21113876/grubhub-seamless...
Also they then use SEO to get their own phone numbers and website higher than the actual restaurant's number/site, basically guaranteeing a cut of any phone/website order, even if the customer doesn't want to go through Grubhub.
Not exactly the same thing, but nearly as problematic:
https://www.nbcnewyork.com/news/local/seamless-restaurant-gr...
https://www.restaurantdive.com/news/why-ghost-restaurants-ar...
https://www.bloomberg.com/news/articles/2018-10-24/uber-s-se...
https://mix1065baltimore.radio.com/blogs/kramer-jess/warning...
> I empathize with this one and don't really have a rebuttal.
Isn’t that classic supply and demand situation? Raise prices to drop demand until load drops to acceptable levels. More money for the restaurant as well as acceptable workload for the restaurant staff.
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.
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
Then they found out company was delivering their food without their permission.
https://www.theverge.com/2020/5/18/21262316/doordash-pizza-p...
> And so the story unfolds. “If someone could pay Doordash $16 a pizza, and Doordash would pay his restaurant $24 a pizza, then he should clearly just order pizzas himself via Doordash, all day long. You’d net a clean $8 profit per pizza [insert nerdy economics joke about there is such a thing as a free lunch],” wrote Roy. They order 10 pizzas this way, and it worked! The money was free, a seamless transfer from SoftBank’s deep venture capital-lined pockets to Roy’s friend’s business bank account. Eventually, in another series of what Roy hilariously calls “trades,” they just ordered pizza dough through DoorDash for $75 in pure profit.
Except sometimes they're out of the book, and so the customer never receives it. Or you damage the book between the book store and the post office, and they receive a badly damaged book.
The customer is going to be mad at the Strand, not at you. You'd be damaging their reputation.
Grubhub literally says 'shows you restaurants that deliver to you', imply the restaurant is delivering, not Grubhub. Furthermore it implies if you order, you're ordering from the restaurant- where Grubhub may have put up that ordering entirely without their consent!
Why does Grubhub have any responsibility to obtain the restaurant's consent? If I pay someone to go to the grocers and pick up some items for me, is that someone obligated to obtain the grocers' permission? Why is this situation different?
If the restaurant is offering pickup service, then to me there is no obligation on any third party to obtain permission to utilize that service and deliver the results to a customer.
Secondly, are the customers not ordering the food from Grubhub? Why would they be confused about a middle-man being present?
In some cases its because GrubHub created a website for the restaurant and they don't make it clear that it's a GrubHub site and not a site operated by the restaurant. If you call the phone number on that site, a GrubHub employee answers as if they are the restaurant.
> ... you type in an address, we tell you the restaurants that deliver to that locale as well as showing you droves of pickup restaurants near you.
The complainants here seem to qualify under the second half of that sentence as long as they are offering a pickup service.
The only reason why it took this long for gruphub is that restaurants do not have the legal resources of a company like Apple or Grubhub, not because this isn't fraud (it is).
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.
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.
Grubhub almost always sticks to a $5 credit even if the problem with the other is much more than $5.
I routinely place an order on Postmates thinking everything's fine, and then they cancel due to not having someone go pick it up. Why list the restaurant at all?
Just last week, my Uber Eats order was missing a sandwich. This was probably the third order in a row where the restaurant didn't include an item as part of the order, with a fourth order containing a pubic hair in the food. For the missing sandwich, Uber refused to refund the one item, citing my account was flagged. After multiple levels of customer service, yeah, they just refused to refund me for a sandwich I never received. It's only $6 and frankly I just disputed it with my credit card, but the principle just sucks. I was halfway to creating a Twitter account to message Dara to ask if this is the new Uber he promised.
> Grubhub is using thousands of fake websites to upcharge commission fees from real businesses
> They also list phone numbers that don’t belong to the actual business
https://www.theverge.com/2019/6/28/19154220/grubhub-seamless...