Market Overview

Report: GrubHub Refunds Restaurant After Excessive Billing

Report: GrubHub Refunds Restaurant After Excessive Billing

Food ordering and delivery marketplace company GrubHub Inc (NYSE: GRUB) refunded at least one restaurant $10,000 after charging $5 to $9 each for phone inquiries from customers, even if no order was placed, the New York Post reported.

What Happened

An anonymous restaurant owner revealed to The Post that GrubHub charged his business up to $9 for each phone call that lasted for more than 45 seconds, regardless of the conversation.

The restaurant owner is concerned that going public would result in retaliation from GrubHub against his restaurant through higher rates or lower visibility on the marketplace, The Post said. 

"I've spoken with a lot of people who fear retribution," Andrew Rigie, executive director of the New York City Hospitality Alliance, told the tabloid. "They are concerned about how their fees will be impacted."

After being made aware of the excessive fees, the restaurant owner demanded GrubHub take action. At first, GrubHub offered to refund 60 days worth of fees, but was ultimately refunded for all charges dating back to 2014, according to The Post. 

“We look forward to engaging with the City Council and other stakeholders on how we can continue to help restaurants grow their business,” Brendan Lewis, Grubhub’s vice president of public affairs, told The Post. 

“We’ve not been asked to refrain from taking action against anyone who speaks publicly at the hearing, nor would we engage in any retaliatory acts. We deeply value our relationships with restaurants," the spokesman said. 

Why It's Important

The restaurant owner's five-digit refund is the largest known settlement with GrubHub, although a handful of other restaurant owners are going public with their concerns. One restaurant entrepreneur is George Tenedios, who owns 32 eateries in New York City.

He told The Post that he and a colleague spent 30 hours each doing a deep dive into how much the businesses were overcharged by GrubHub.

What's Next

GrubHub executives will speak with the New York City Council on Thursday. The food delivery company will likely explain the fees charged on its platform which multiple restaurant owners say are excessive.

Related Links:

Starbucks And Grubhub: 'Trading Nation' Millennial Picks

Analysts: Amazon's Exit From Restaurant Delivery Implies Less Competition For Grubhub

Photo courtesy of GrubHub. 

Posted-In: Food Delivery New York PostNews Restaurants Media General Best of Benzinga


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