Small in the tech world, the online delivery service becomes a big target for pols.
Like Facebook, Google and other online goliaths, the Chicago-based restaurant ordering and delivery service is under fire from politicians and other critics who say tech companies are steamrolling traditional businesses and/or unsuspecting consumers. In recent months, Grubhub has been accused of everything from fee-gouging to cybersquatting.
With a total stock market value of less than $7 billion, the company is a fraction of the size of other targets of anti-tech anger. (Facebook is valued at more than $500 billion; Amazon and Apple are nearly $1 trillion each.) And unlike Facebook and Google, Grubhub faces plenty of competition from strong rivals. Still, the accusations of bullying tactics show that burgeoning public resentment of tech companies isn’t confined to industry behemoths.
But Grubhub doesn’t have the same resources a Facebook or an Apple can deploy to counter criticism or launch massive image makeovers or apology campaigns. And the attacks threaten to become a costly distraction at a time when the company is spending heavily to build a nationwide brand and battling to preserve its market share and profit margins amid discounting by increasingly aggressive rivals DoorDash and Uber Eats.
… “I feel like I can no longer downplay things like this,” says Forte, the New York-based analyst. “(Grubhub’s situation in New York) is heading down the wrong path. At worst, it’s something that’s going to inspire legislation that’s not going to be favorable. But it won’t be favorable to any of them: DoorDash, Uber or Grubhub.”