Is all fair in the food delivery war?
The love-hate relationship between restaurants and third-party delivery providers continues to show some cracks. As of this writing, there had just been a hearing in New York to hash out differences regarding the fees that third-party vendors charge restaurants for their services, which tend to range from 12 to 30 percent of each check total, according to the AP. In the meantime, some restaurants have alleged that the charges from third-party delivery companies aren’t stopping there. A class-action lawsuit filed in Pennsylvania in May claimed that Grubhub was charging for calls to restaurants that were made through the Grubhub app even if the call did not result in an order. (For example, a New York Post report said calls for reservations and customer complaints were being charged.) And there’s yet another wrinkle: A new report in New Food Economy found that Grubhub had purchased more than 23,000 potential restaurant website domain names, which would enable the company to prevent the restaurants from using those domains (without Grubhub’s involvement, anyway) to support their businesses. The sites appear to be for the restaurant in question but phone numbers shown on them direct users to Grubhub and then are forwarded (and charged) to the restaurant. Grubhub then receives a commission between 3 and 15 percent per order placed this way. For its part, Grubhub told New Food Economy that it purchased the sites to give restaurants an additional source of restaurant orders and that any affected restaurants could request to have their domains transferred to them. Regardless of the outcome, at a time when delivery has become compulsory for restaurants, restaurant operators would be wise to screen their contracts carefully — and to consider the future of their web presence. Third-party delivery vendors can help smaller brands compete with larger ones that have the resources to manage their delivery in-house but it’s important to understand where the costs may outweigh the benefits.
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