Grubhub execs grilled over bogus fees

Grubhub drew snickers and guffaws at a City Council hearing Thursday as its executives for the first time attempted to defend the company — which also owns Seamless — against allegations that it has been overcharging its restaurant customers for years.

But not a single Grubhub supporter made the downtown Manhattan powwow — because they were busy with the “lunch rush,” Naim told the committee.

This drew scoffs and laughter from the crowd, which included restaurateurs who took time away from their busy schedules to testify about GrubHub’s practices, including the owners of 5 Napkin Burger, Enoteca and Tribeca’s Kitchen.

As The Post first reported in May, restaurants from Philadelphia to the Big Apple say the online ordering and delivery company has been cheating them out of as much as thousands of dollars a month — some for years — tied to fees for telephone orders that never happened.

“There is not enough time to deal with this,” Andreas Koutsoudakis, owner of Tribeca’s Kitchen, told the committee of the fees, which are tied to any phone call over 45 seconds through a Grubhub-dedicated line — whether it results in an order or not.

Grubhub is supposed to only charge restaurants for orders that it helps generates.

Grubhub revealed Thursday that it made about $30 million last year on phone orders nationally, or about 3% of revenue. It’s unclear what percentage of the $30 million was generated by bogus orders, but restaurant operators who’ve talked to The Post estimate that about half of their phone charges come from calls that did not result in orders, including customers complaining about their delivery being late .

The hearing turned heated when Grubhub started to get questioned about refunds.

“We feel two months is an appropriate amount of time” for a refund, Kevin Kearns, a senior vice president, said during the hearing. “If they are unhappy with the resolution, we’ll determine the best course of action,” he dryly said.

That prompted City Councilmember Mark Gjonai to blast the execs — generating applause from the crowd.

“My feedback is simple,” Gjonaj said. “Go back to the very first day that that business signed its agreement with you, assess all the phone charges that were made, have someone listen to each and every recording, and if there was a phone charge for a restaurant that never took place and never yielded a sale, you would call them up and say, ‘Hey Reggie … I’ve got a nice check being refunded to you.’”

Gjonaj also warned GrubHub not to retaliate against restaurant owners who spoke at the hearing. But at least one owner who attended the hearing and did not testify, Yiamni Berbeis of Telio eatery, told The Post that his takeout business with GrubHub has been down about 15% since he spoke out about the fee issue in a recent CBS television interview.

“I don’t know for sure if there’s a connection, but it’s possible,” Berbeis told The Post.


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