A new report by Vice reveals yet another marketing tactic by Grubhub that attempts to maximize the commission fees it can charge to restaurants when customers order through the service. Yelp, a Grubhub partner, quietly hides a Grubhub-affiliated phone number when you choose to call a business from the Yelp app. (Disclaimer: my parents own a restaurant and are listed on Grubhub and Yelp.)
As detailed by Adrianne Jeffries for Vice, a Yelp listing for a restaurant shows the correct phone number for the business. If users click to “order delivery or takeout,” they are presented with the option to order through a deep-linked Grubhub app. However, if they click the actual phone number listed to call the business directly, the phone number that appears on the dialer is not the official one that is shown on the listing. Instead, a different number is used so that Grubhub could track it as a “marketing” call, giving the company the ability to bill restaurants upwards of 30 percent commission instead of fees as low as 3 percent. The Verge was able to independently re-create the behavior.
The report comes after a June investigation by New Food Economy found that Grubhub had been creating tens of thousands of dummy websites that list unaffiliated contact information about restaurants. When customers use these Grubhub-generated phone numbers to make orders, it is able to charge restaurants higher commissions. The New York Post reports that restaurants are also seeing increased commissions billed even for calls that don’t result in an order, such as inquiries about restaurant hours or food allergies.
Grubhub later responded that its contracts allow it to create these “microsites” as marketing material, and its partnership with Yelp allows the two companies to utilize such commission-hungry tactics.
“It is our understanding that Grubhub has marketing agreements with some restaurants that allow Grubhub to utilize referral numbers on third party partner sites like Yelp,” a spokesperson for Yelp told Vice. In a recent podcast episode for Underunderstood, Jeffries says Grubhub-generated numbers start with a notice informing customers that calls are “recorded for awesomeness.”
Last weekend, my boyfriend and I searched for “takeout” on the Yelp app. It filtered all the results to only restaurants that were on Grubhub, and clicking menu lead you to the Grubhub order page. The amount of deep linking to maximize commission is wild. https://t.co/AdrjMJrr2r
— Natt การุณรังษีวงศ์ (@nattgarun) August 6, 2019
Ordering food online has many benefits, but oftentimes, it comes at the expense of locally owned businesses that pay high commissions to third-party services like Grubhub. Ordering direct could help, but it also requires a lot of research on the customer’s part to cross-verify information. This can be particularly difficult since Grubhub owns multiple restaurant listing properties across the web, including AllMenus, Eat24, Seamless, and MenuPages. In New York City, council member Mark Gjonaj is calling for an antitrust investigation against Grubhub.