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"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.

> 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).

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).

I don't get it, how would the restaurant be losing money from this behaviour? Isn't Grubhub paying the regular takeout price, same as if you order it yourself?

At face value non-partnered restaurants dont lose money, they simply get more customers (essentially, getting some of the services that partnered restaurants get, but for free since partnered restaurants pay fees for each order that goes through the platform)

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.

People order every day from non Amazon, non Amazon Prime sellers on Amazon. My feeling is end users know what they’re getting into as long as they’re informed the restaurant is non partnered, and your bosses just need to take the 5m to come up with a brand.

I’ve heard many stories about people’s orders taking longer than 2 days to arrive[a] (sometimes even 5+ weeks). When asked, they say they ordered on Amazon and are upset at Amazon for it being late. After you explain that Amazon is also a marketplace, they understand why it’s late (it’s the seller’s fault), but they’re still upset at Amazon for not making it clear enough that it wasn’t going through Prime.

[a]: I.E. non-Prime purchases (ignoring the fact that Prime purchases can also just be late)

That indicates mostly a branding/communication problem and not something fundamentally wrong with the practice of layering services over other third-party services.

People don’t realize that Amazon Prime doesn’t promise 2 day shipping from the time you order. It’s 2 day shipping from the time they fill your order, which could be a week or two later.

It's a bit more nuanced than that. The best way to think of food delivery businesses funded by VCs is to think of them as payday lenders.

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...

Grubhub fucks up the order, the customer leaves a bad yelp/google review for the restaurant. (Because the customer was tricked into believing that they were interacting with the restaurant the entire time.)

That's why this is fraud.

Here's an excerpt from their October 2019 letter to shareholders. TL;DR - they're a public company and the markets told them they needed to keep growing in order to survive.

> 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/...

> 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.

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.

yes - this is not "opt out", it's not even "default opt-in" like the telecoms got spanked for a few years ago, because they have no pre-existing relationship. It's fraudulent representation.

While I agree, restaurants do tend to pick up on this over time because (more issues with Place & Pay) people will complain to the restaurant about food being cold/slow not realizing that the restaurant isn't even involved in the delivery. Sometimes the delivery people make it quite obvious (e.g. drivers are given GH branded credit cards to pay with)

> people will complain to the restaurant about food being cold/slow not realizing that the restaurant isn't even involved in the delivery

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.

> restaurants do tend to pick up on this [fraud] over time

Fixed that for you.

> The restaurant can opt out of this

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.

That sounds like a wasted opportunity. Drop a note into the bag with the food. 'hey cut out the middleman call us directly the prices are better!'

Don't bother with food, just put rocks in there.

1 star review 'they put rocks in my food'

No food, just rocks.

I get that the restaurant owner was frustrated but this is like giving your waiter a bad tip because your food didn't taste good - you really think the driver has any influence on which restaurants get listed?

I assume they probably don't care about how a random scummy startup works; they want no part in it, including the rigmarole for opting out (if one exists).

No, but if you manage to identify all of these delivery people and refuse them service I bet that they unlist you.

That's a fairly unreasonable assumption. Odds are the only thing a human at corporate will ever see is "Driver John Doe could not complete delivery, customer complained" Unless purely by chance the same person just so happens to see the same issue with the same restaurant a few times, it's very unlikely that they'ed notice a trend, nonetheless correctly deduce its cause. The person in charge of making sure deliveries get completed is almost certainly not the person handling restaurant partnerships.

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'm going to start showing up at your house and ringing the doorbell once a day until you follow my opt-out procedure.

If you hire a different kid everyday to ring my doorbell and don't tell them you've been pestering me for weeks, I'm not going to take it out on the kid.

Note I said every. It is very unlikely that you could manage it. But if their success rate for a particular store. dropped to zero I suspect they would notice sooner or later.

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.

Tell me something: if I'm sick at home, am I allowed to get a friend to go purchase take-out for me? And if I don't have someone who is able to do that for me, am I just supposed to starve?

To a first approximation, I can't really see why Place and Pay should be illegal. It's basically paying the neighbor kid to go pick up some dinner for you, writ large.

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.

To me it gets 'shitty' when they do this without disclosure. I have no problem with placing an order with GH and having them place the order for me, but when they masquerade as the restaurant and try to hide that from the customer is where the problem comes in.

And what happens when orders go wrong?

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.

We had the same experience with GH once(and never again as we canceled). The food arrived and was completely inedible. The restaurant sent out a vindaloo that was the most unnatural red color, like they had dumped a bin full of chili flake in it.

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.

> the only way to resolve the problem was to do a chargeback because neither merchant would take responsibility

I assume that hurt GH?

Even worse, then the customer -- thinking the restaurant messed up -- writes a poor Yelp review for the restaurant, not understanding the game of telephone went wrong.

Is it a problem when your friend “misrepresents” that the order is for them? Or is it just a scale thing?

> To a first approximation, I can't really see why Place and Pay should be illegal. It's basically paying the neighbor kid to go pick up some dinner for you, writ large.

The service itself isn't illegal, but impersonating the restaurant is.

The possibly fraudulent part is that the customers is led to believe they're dealing with the restaurant.

This is the crux of the issue, especially when these services are happy to pass the buck when the delivery falls short and blame the restaurant.

I mean it's not fraud to blame your suppliers for problems that are the supplier's fault. It doesn't magically mean you're representing them. My local grocery store was out of tempeh because the factory they buy it from shut down due to a COVID scare. It doesn't mean that I suddenly think my grocery store is speaking as the supplier.

It certainly feels like fraud if that so-called supplier never agreed to be a vendor in the first place. If the line to check out at the grocery store was 2 hours long, you wouldn't blame the company who packaged the tempeh. If a mobile food order takes 2 hours because it requires someone to act as a proxy for the customer, then the blame should fall on the middleman service.

So I don’t really get the issue then. If my business is making custom computers and I buy parts from Microcenter then they’re my supplier whether there’s a business agreement or not. And telling my client that a part they asked for is sold out and so there will be a delay isn’t fraud.

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.

Apologies for the 2 day late reply, I forget to check my comments on HN far too often.

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.

because it doesn't SAY place and pay

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.

There can be a big difference in time between the people who pickup food and bring it right back to their place and the GH employee who has it sitting in their car for 30 min before he gets to your place. This can make the experience worse and hence hurt the restaurants reputation.

Or when the driver does multiple orders at once. That’s really upsetting. Because I’ll get a notification that the driver is approaching with my order (about a minute away), and then they proceed to drive past my house into a neighborhood 5-10 minutes away, and then come deliver my food 15-20 minutes after it was picked up.

If the driver is going to do multiple orders at once, I should be informed of this.

Perhaps there is a case to be made here around how reasonable person principle should be applied, because the defense can argue that only an idiot blames the company cooking the food when the independently-contracted delivery guy is too slow.

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).

No lawyer but demonstrating that "only an idiot blames the company cooking the food when the independently-contracted delivery guy is too slow" seems quite challenging, people leave reviews for all kinds of random, unrelated reasons.

I would never make a bet on peoples inability to be idiots.

Especially so when the independently contracted delivery guy impersonates the restaurant. A reasonable person will assume that the website restaurant-xyz.com connects them to the restaurant xyz and if they place an order, they are placing an order with that restaurant, not an independent contractor.

Hey, if it's just fast food why does the market even care who prepares it? How long till these food "delivery" services just capture all the addressable market masquerading as a bunch of uninformed, non-participating restaurants and make the food they deliver? Why are they leaving all this extra margin on the table?

Pizza is not fast food. And every pizza place makes their pies differently. They're not completely commodified, at least not for people ordering regularly.

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.

> Pizza is not fast food.

Some pizza is not fast food.

"The market" doesn't have opinions any more than "the environment" does.

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.

This is what Pasqually's/Chuck E Cheese does[1].

[1] https://www.businessinsider.com/diners-discover-that-pasqual...

They'd rather just run the last delivery step and suck up all the profits. Let the sucker restaurant owners assume all the cost of setting up operation and crafting a menu only to run it on no margins.

> It's basically paying the neighbor kid to go pick up some dinner for you

Except you know what your are doing. It isn't clear GH customers do.

I do appreciate your candor, however it is clear that GH engages in "kinda shitty" business practices.

FWIW, Postmates has been doing these "Place & Pay" orders since ~2012. A courier for Postmates was more akin to someone taking orders from an app like Favor/TaskRabbit than a purpose-built restaurant delivery service.

I think it shows courage for a non-PR employee to participate in a conversation like this.

Thank you!

reminds me of the pizza arbitrage article and discussion from a few months ago...

https://news.ycombinator.com/item?id=23216852

https://themargins.substack.com/p/doordash-and-pizza-arbitra...

why is DD not getting sued? Why is grubhub the one getting sued?