News

Grubhub calls Schumer's 'fake fee' accusations 'flagrantly inaccurate'

Image courtesy of Grubhub

July 15, 2019

Grubhub isn't backing down from New York Sen. Chuck Schumer's accusations that it has been charging delivery fees to New York restaurants for orders that weren't made. 

Schumer sent out a tweet Sunday night saying that the Small Business Administration was investigating the matter first reported in May by the New York Post. The article said Grubhub was charging restaurants fees of $4 to $9 for telephone calls that received no orders. Schumer wants the SBA to assess the issue and report findings to Congress right away. 

“Fake” fees that @Grubhub is charging New York restaurants or even customers should stop.

If it’s an algorithm problem, they should put in an order to fix it.@SBAgov is investigating and must report the impact on businesses to Congress ASAP.https://t.co/h3jGfxr0Vn

— Chuck Schumer (@SenSchumer) July 15, 2019

Grubhub, however, denies Schumer's claims.

In an email to FastCasual, a spokesperson said they were "flagrantly inaccurate" and that restaurants sign "fully negotiable contracts" that detail fee structure.

"Make no mistake, Grubhub levels the playing field for independent restaurants to compete with larger brands and provides them with the tools to attract, retain, and maintain loyal, profitable customers, the spokesperson wrote. "We only make money if we drive business to restaurants, including the $5 billion in sales we sent to restaurants last year alone. We will continue to highlight the value we bring to local restaurateurs and to directly disprove false allegations about our business that have recently been spotlighted."

The Grubhub spokesperson also called recent allegations that Grubhub had engaged in cybersquatting "absolutely false."

"In the past, we have registered domain names and created websites as a way for restaurants to drive more online orders," she wrote. "In every case, restaurants gave us explicit permission to do this, and we have always given restaurants the ability to assume control of any domain created for them. Grubhub charges restaurants close to zero in marketing commissions on orders that go through these websites."

Another way Grubhub helps restaurants drive more orders is through a phone number diners can use to place orders over the phone, although it makes up a tiny fraction of total order, she said.

"We consider a number of factors to identify orders driven by our marketplace that are placed through a restaurant’s phone number, including the duration of the call and the number of times a diner has called," she said. " Restaurants have the ability to review and audit recordings of phone calls through their dedicated portal and can easily dispute any charges by providing context details to their account advisor or our restaurant care team.

Not only are phone orders addressed in our restaurant contracts, but we give restaurants full disclosure into these orders in their monthly statements with a separate, dedicated line item."

Spokespersons for Schumer and the SBA were not immediately available for comment.