GrubHub CEO Accuses Rivals Of Tricking Customers

After his company reported mixed quarterly earnings, GrubHub CEO Matt Maloney accused his competitors of gouging customers with hidden fees. Eat It GrubHub’s reported softer-than-anyone-would like earnings during its second quarter, declining 12.3%, to close at 69.93, the third quarter in a row of revenue deceleration. In response, Maloney took a page from the Don Draper handbook and changed the conversation. Sometimes his rivals, such as PostMates and DoorDash, advertise low delivery prices, and then, in his opinion, "trick" consumers by sliding in hidden charges such as "delivery fee," and "service fee," or they mark-up the total cost of items to make up for low fees. In an analyst call, he said “'The price gouging in our industry...I'm concerned that it will dramatically slow the growth of our industry," he said. On Dasher DoorDash, one of GrubHub’s biggest rivals, has been hit with criticism lately for a change in its payment models. Until 2017, DoorDash paid its delivery people a flat $6 fee per order, plus tips from the customer. Then it adopted a model where tips are now included in the guaranteed minimum. DoorDash will contribute money to make certain a delivery person is paid a certain minimum, but including tips as part of the minimum is ultimately seen by critics as a way to pay delivery people less. The Rising The food delivery sector, in general, is having trouble staying sustainable as delivery prices rise. In response, GrubHub has partnered with the app OpenTable to reach new customers, and Maloney says his focus is to continue to provide restaurants with high volumes of orders and keep fees low. -Michael Tedder Photo: Lucas Jackson/Rueters