After fielding complaints about incorrect charges since the spring of 2019, it seems that Grubhub has finally settled on a solution.
The delivery platform’s troubles began in May of last year when the New York Post reported restaurants across the country facing incorrect charges from the company. According to the report, restaurants faced $4 to $9 charges for phone calls made through Grubhub channels, even if the customer only contacted the restaurant for information and never made a purchase. In other words, restaurants were charged a commission for sales made via Grubhub — even if no sales were made.
In August, Grubhub responded to public criticism with a three-point plan, the focus of which was an extended look-back period for disputed charges, up to 120 days from 60. At that point, Grubuhub also launched a new website intended to streamline the process of restaurants requesting direct control over URLs registered as part of their Grubhub contracts. The delivery platform also announced its plan to host future roundtable events fostering conversation between its staff and clients.
Unfortunately for Grubhub, their plan wasn’t enough to appease restaurateurs or local government officials. On October 30, 2019, the New York City Council sent a letter to Grubhub CEO Matt Maloney stating that the company’s changes had not stopped the flood of complaints from restaurants dealing with incorrect charges. In addition to calling for refunds for all affected clients, the letter threatened legislation addressing Grubhub company policies if the issues weren’t resolved.
In response to the Council’s threat, Grubhub formed a third-party task force to review its policies regarding phone orders and communication with restaurant partners. At the recommendation of the taskforce, Grubhub rolled out revised phone services for diners and restaurants nationwide at the beginning of this year.
When contacting a restaurant via phone, diners are now asked to press “1” if placing an order, and “2” for all other services. Grubhub hopes that this change will make it easier for account advisors to identify conversations where no transaction is completed, resulting in fewer incorrect charges. It’s important to note that these changes also affect Seamless, the Manhattan-focused delivery app owned by Grubuhb.
While Grubhub’s legal issues may seem resolved, for now, not all New York City officials were satisfied with the changes: Councilmember Mark Gjonaj spoke out against the reforms, describing them as “insufficient” in addressing the money lost by restaurants already charged in error.
Disputed charges aren’t the only scandal that Grubhub has been a part of as of late. The platform is also suspected of price-gouging its restaurant partners and engaging in cybersquatting, accusations that led U.S. Senator Chuck Schumer (D-NY) to call for a federal investigation into the company last July.
All this comes at a time when delivery platforms as a whole are under scrutiny. Last fall, DoorDash found itself facing a public outcry after it was revealed that the company was using its workers’ individual tips to subsidize their base pay. Just last month, both DoorDash and Grubhub were once again in hot water for adding restaurants to their platforms’ listings without consent.
Issues with delivery platforms are a cause of great concern for restaurants, which are all but required to offer online delivery services in order to find success in today’s market. That said, restaurateurs should feel safe in continuing their partnerships with delivery service providers for the time being.
While there is still room for some much-needed improvements among delivery platforms, it’s become clear that public criticism can be enough to get companies to revise their policies and practices. Further, legislators have increased their scrutiny of delivery providers in light of recent scandals. Though there are no guarantees, it’s likely that delivery platforms will catch on to the increased surveillance and begin to self-police, improving their practices before more issues arise.