NYC’s fight with Grubhub is heating up. Here’s what’s next

New York is gearing up for an epic food fight.

Senate Minority Leader Chuck Schumer, D-N.Y., singled out Grubhub over the weekend, calling for greater oversight after allegations of unfair trade practices.

…Councilman Mark Gjonaj, the New York City lawmaker spearheading the push to regulate Grubhub, said it goes beyond just bogus fees.

“These mom-and-pop shops have an unfair disadvantage,” Gjonaj told CNBC’s “Fast Money ” on Monday. “They’re competing against billion-dollar venture capital-invested companies. The fee structure is up to 33% of the total charges, and we know [their] profits are 6% to 12%. On every order, there is a net loss to these small businesses.”

In one of Grubhub’s pricing breakdowns, the company says it charges a 20% marketing commission, 10% delivery commission and roughly 3% processing fee to the restaurant on every order. That amounts to upwards of a third of the total revenue to the restaurants.

Gjonaj recently escalated the fight against Grub by petitioning New York Attorney General Letitia James to open up an antitrust investigation into the company. Grub holds nearly 70% market share in New York City, according to research firm Second Measure, its largest footprint in the U.S.


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