Grubhub CEO Calls Out Delivery Rivals For Price Gouging; Stock Drops 14% On Earnings

Grubhub CEO Matt Maloney, on the heels of a lukewarm earnings report that pummeled the company’s stock, criticized rivals DoorDash and Postmates for high service fees, extra costs hidden in menu markups and subscription programs he described as “bogus.”

“The problem is by egregiously price-gouging consumers, at some point, they will figure it out,” he told Forbes. “I trust the consumer, ultimately.”

In particular, he took issue with the service fees other competitors charge at the end of an order that drive up the price in addition to delivery fees. For example, a recent $30 dumpling order on UberEats had a $5.99 delivery fee tacked on, plus another $4.60 service fee and $2.68 in taxes, bringing the total bill to over $45 with tip. Grubhub, by comparison, doesn’t charge a service fee.

…One business decision Maloney particularly harped on was the increase in service fees and menu markups among the competition, which he compared to the “Wild West” of travel where objective price wasn’t well-known.

“Diners are often paying 30% to 40% of a bill in fees and markups when they order from the competition, and that’s not right. And we’re going to start calling out others who charge much higher fees even when they promise free delivery,” Maloney told Forbes after the call.

more

Leave a comment

Your email address will not be published. Required fields are marked *