Watch out for fake restaurant websites thanks to delivery service’s shady plan

So what’s wrong with GrubHub building a fake web page for one of its restaurants as long as the eateries get the money from the sale? It all comes down to GrubHub’s commission model.

If you find out about a restaurant through GrubHub’s app or one of its promotions, the company can charge the restaurant a higher commission because it’s bringing in new business.

But what if you don’t find the restaurant on the app and you call the restaurant directly? GrubHub will still deliver the meal, but it will get a smaller commission and the restaurant will make more money.

That’s where the fake websites come in. If a customer lands on a restaurant’s fake website and calls the fake number, GrubHub will forward the call to the real restaurant. You see, GrubHub receives a commission for every phone call it handles for a restaurant and charges a higher commission.

Millions in commissions investigated

At a recent hearing in New York City Hall, GrubHub executives estimated the company made $30 million in phone commissions last year alone. According to New Food Economy, the commission system uses an algorithm to find out whether a phone call resulted in an order. But the system is prone to costly mistakes.

GrubHub states that its restaurant partners can log into the back end of its site and listen to all phone recordings to make sure they aren’t being charged for calls that didn’t result in orders. The owner of one small restaurant did just that and found that GrubHub owes her about $30,000 in commission overcharges.

GrubHub issued this statement in response to the New Food Economy report:

“GrubHub has never cybersquatted, which is identified by ICANN (Internet Corporation for Assigned Names and Numbers) as ‘generally bad faith registration of another person’s trademark in a domain name.’ As a service to our restaurants, we have created microsites for them as another source of orders and to increase their online brand presence.

‘Additionally, we have registered domains on their behalf, consistent with our restaurant contracts. We no longer provide that service and it has always been our practice to transfer the domain to the restaurant as soon as they request it.”


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