Grubhub is a good business for restaurants, but does it raise food prices?If you don’t feel like cooking or if you’d like to feed a group of friends, food delivery apps can be extremely handy. Nevertheless, a spike in demand has happened due to the pandemic, and top apps are seeing more profits than ever.
However, does this mean that profit earned by these companies trickles down to delivery partners and restaurants? Unfortunately, this is not always the case. Uber Eats and other major food delivery apps have faced pressure in the past to lower their commission rates. In comparison, what is Grubhub’s commission structure?
Grubhub: What Is It and How Does It Work?
Grubhub is among the main food delivery apps benefitting from this boom. Grubhub, which was founded in 2004, is one of the top four delivery apps in the US, along with Uber Eats, Postmates, and DoorDash. The company serves customers in over 3,200 cities nationwide.
You might be familiar with other food delivery apps like Grubhub. You can browse restaurants and eateries near you that partner with Grubhub for food delivery by downloading the app and creating an account. To start ordering your favorite meals near you, you can sign up for an account on the Grubhub website.
Grubhub allows you to pay via a variety of methods, including debit or credit card, PayPal, Apple Pay, eGift cards, or even cash upon delivery.
Grubhub: How Does It Work for Drivers?
A person who is looking for a side income can become a delivery driver for Grubhub. If you plan to ride a bike, make sure you have a vehicle, a valid driver’s license, or a state ID that includes a photo and a smartphone. It is also required that you are at least 19 years old to work for Grubhub.
When you have those ready, simply download the Grubhub For Drivers app or create an account on the Grubhub For Drivers web page. Then, attach the above relevant documents to your online application.
Approximately one week after submitting your application, Grubhub will send you an email with the results. Then you’ll receive a delivery bag and a Grubhub t-shirt, and you’re good to go.
You will be taken to the Tasks page as soon as you open the Grubhub For Drivers app. Here, you can toggle your availability from ‘Unavailable’ to ‘Taking offers’ to start working.
The app has a map that shows drivers where nearby delivery hotspots are, and drivers can head to those locations to start delivering meals. For example, when Restaurant A confirms an order, drivers around Restaurant A will be notified that an order is waiting to be picked up and delivered.
What Is Grubhub’s Role in The Restaurant Industry?
Many restaurants have begun partnering with food delivery apps in order to stay in business. Grubhub claims to have over 245,000 restaurant partners across the country and processes about 668,000 orders every day.
Restaurant owners who wish to work with Grubhub must follow similar steps and are equally easy to apply. You can get started by going to Grubhub’s Grubhub For Restaurants page and entering your restaurant’s name, ZIP code, and other details.
A Grubhub sales representative will contact you to request additional documents and a copy of your restaurant’s menu. At that time, you will be able to serve hundreds of hungry customers.
Grubhub charges restaurants a base commission of 10 percent, a marketing fee of 20 percent, and a processing fee of 30 cents plus 0.35 percent. Because companies like Grubhub charge such exorbitant fees, restaurants are forced to hike up their food prices on the apps to cover the cost.
This means that you, the customer, are essentially paying for every fee in the food delivery chain: delivery fees, service fees, sales tax, advertisement fees, and other miscellaneous fees, just to keep the company and its partners running.