Grubhub

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Grubhub Inc.
Formerly
GrubHub Seamless Inc.
(2013–2014)
Public
Traded as
IndustryOnline platform for restaurant pick-up and delivery
Founded2004 (2004)
Founder
  • Matt Maloney
  • Mike Evans
HeadquartersChicago, Illinois, U.S.
Area served
United States
Key people
RevenueIncrease US$1.01 billion (2018)
Decrease US$84.96 million (2018)
Decrease US$78.48 million (2018)
Total assetsIncrease US$2.07 billion (2018)
Total equityIncrease US$1.44 billion (2018)
Number of employees
Increase 2,773 (Jan. 22, 2020)
SubsidiariesBiteGrabber
Eat24
LevelUp
Seamless
Tapingo
Websitegrubhub.com
Footnotes / references
[1]

Grubhub Inc. is an American online and mobile prepared food ordering and delivery marketplace that connects diners with local takeout restaurants. The company is based in Chicago and was founded in 2004. As of 2019, the company had 19.9 million active users and 115,000 associated restaurants[2] across 2,200 cities in the United States.[3]

Overview[edit]

In 1999, Seamless was founded by Jason Finger and an associate.[4] In 2004, Grubhub was founded by Matthew Maloney and Michael Evans to provide an alternative to paper menus.[5] In 2013, Grubhub and Seamless merged.[6] The combined organization, Grubhub Seamless, went public in April 2014 and trades on the New York Stock Exchange (NYSE) under the ticker symbol "GRUB".[7]

History[edit]

Grubhub history[edit]

Chicago-based Grubhub was founded in 2004 by Mike Evans and Matt Maloney, to create an alternative to paper menus.[8] Two years later, in 2006, Maloney and Evans won first place in the University of Chicago Booth School of Business's Edward L. Kaplan New Venture Challenge with the business plan for Grubhub.[9]

In November 2007, Grubhub secured $1.1 million in Series A funding, led by Amicus Capital and Origin Ventures for the purpose of expanding into San Francisco and New York markets.[10] In March 2009, Grubhub earned $2 million in Series B funding, led by Origin Ventures and Leo Capital,[11] which was followed by $11 million in Series C funding, led by Benchmark Capital in November 2010.[12] $20 million in Series D funding was raised (led by DAG Ventures) in March 2011.[13]

Grubhub's portfolio of brands includes Seamless, AllMenus, MenuPages, LevelUp, and Tapingo. Seamless is an online and mobile food ordering platform for regional restaurants active in the U.S. and London.[14]

In September 2011, Grubhub secured $50 million in Series E funding and acquired New York-based competitor Dotmenu, the parent company of Allmenus and Campusfood.[15] Grubhub completed the acquisition of AllMenus that month.[16] MenuPages was acquired by Seamless in September 2011.[17]

DiningIn, an online ordering and food delivery company based in Brighton, Massachusetts, was acquired by Grubhub in February 2015.[18] Restaurants on the Run, a corporate food delivery company based in Aliso Viejo, California, was acquired by Grubhub in February 2015.[19]

In December 2015, Grubhub acquired Delivered Dish, a restaurant delivery service in seven markets across the Pacific Northwest and Southwest, including Denver, Las Vegas, San Diego, Portland, El Paso and Albuquerque.[20][21] LAbite, a Los Angeles-based restaurant delivery service, was acquired by Grubhub in May 2016.[22]

In August 2017, Grubhub entered into an agreement to acquire Eat24 from Yelp for $287.5 million, subject to regulatory review.[23] In October 2017, Grubhub announced that had it completed its acquisition of Eat24.[24][25] In late 2018 Grubhub shut down the Eat24 brand.[26]

Certain assets were acquired from 11 franchisee-owned OrderUp markets in September 2018. Certain assets from 27 OrderUp markets had already been acquired in 2017.[27] GrubHub completed its acquisition of OrderUp in October 2018.[28]

LevelUp, a Boston-based diner engagement and payment solutions platform was acquired by Grubhub in September 2018.[27] The acquisition of LevelUp was for a reported or $390 million cash.[29] Tapingo, a San Francisco-based platform for campus food ordering was acquired by Grubhub in November 2018.[30]

Seamless history[edit]

In 1999, New York lawyer Jason Finger founded SeamlessWeb to provide companies with a web-based system for ordering food from restaurants and caterers. Six years later, in 2005, SeamlessWeb introduced a free ordering service to consumer diners to complement the existing corporate-ordering service.[31] In April 2006, SeamlessWeb was acquired by Aramark and integrated into its Food, Hospitalities, and Facilities segment.[32]

Jonathan Zabusky was named president of Seamless in 2009, and by June 2011, Seamless was re-privatized, as Boston-based Spectrum Equity Associates invested $50 million for a minority stake in the company from Aramark. The company then changed its name from SeamlessWeb to Seamless.[33]

In September 2011, Seamless acquired MenuPages,[34] and in February 2012, Seamless released an iPad app.[35]

Grubhub and Seamless merger[edit]

In May 2013, Grubhub and Seamless announced that they were merging, with Seamless representing 58% of the equity and GrubHub representing 42% of the equity of the combined business; the merger was finalized in early August 2013.[36]

IPO[edit]

Grubhub went public in April 2014 at a price of $26 per share. It trades on the New York Stock Exchange (NYSE) under the ticker symbol "GRUB".[37]

Delivery[edit]

In June 2014, Grubhub began offering delivery for restaurants that don't operate their own delivery service. The company is now delivering in more than 50 markets across the U.S.[38] (publicly announced markets include Atlanta, Phoenix, Philadelphia, Los Angeles, San Francisco/Bay Area, D.C., Southeast Florida, Portland, Denver, Pittsburgh, Detroit, San Diego, Brooklyn/Queens (NYC), Chicago and Las Vegas).

In July 2018, Grubhub announced that it expanded its delivery capabilities to 28 new cities in the US.[39][40][41]

Grubhub's UK competitors are Deliveroo, Just Eat, and UberEATS. In the U.S., its competitors include Uber Eats, DoorDash, Postmates, EatStreet, Amazon Restaurants and Online Restaurants.[42]

Controversy[edit]

On November 10, 2016, after the victory of President Donald Trump in the general election, Grubhub President and CEO Matt Maloney sent a company-wide memo to employees saying that he rejected "nationalist, anti-immigrant and hateful politics of Donald Trump". The Washington Times reported that Maloney "unleashed a political screed after the Nov. 8 election and said that those who disagree with its anti-Trump views should resign."[43][44]

After a Twitter boycott campaign was initiated, Maloney later claimed his words were "misconstrued", adding "I want to clarify that I did not ask for anyone to resign if they voted for Trump. I would never make such a demand. To the contrary, the message of the email is that we do not tolerate discriminatory activity or hateful commentary in the workplace, and that we will stand up for our employees."[43] In a tweet that was later deleted, Maloney added: "To be clear, Grubhub does not tolerate hate and we are proud of all our employees - even those who voted for Trump."[44] By Thursday night, the hashtag #BoycottGrubHub was trending on Twitter.[45] Following Maloney's statement, on November 11, 2016, the company's shares dropped 5.93%.[46][45]

Labor lawsuits[edit]

Lawson vs. Grubhub[edit]

In February 2018, US Magistrate Judge Jacqueline Scott Corley found that Grubhub correctly classified plaintiff Raef Lawson as an independent contractor and rejected his misclassification claim in the Lawson vs. Grubhub court case.[47]

In a 2017 lawsuit, attorney Shannon Liss-Riordan said that the company uses words such as “blocks” instead of “shifts" to re-label words and create a false narrative to justify its misclassification of drivers as contractors.[48]

Assembly Bill 5[edit]

Grubhub is in the midst of a lawsuit surrounding the misclassification of independent contractors. California Assembly Bill 5 (2019) was passed September 18, 2019.

Wallace v. Grubhub Holdings[edit]

The Wallace v. Grubhub Holdings contractor lawsuit alleges that Carmen Wallace and Broderick Bryant and other drivers were misclassified as independent contractors and Grubhub defied wage-and-hour requirements under the Fair Labor Standards Act, the Illinois Minimum Wage Law, and the California Labor Code.

The plaintiffs in Wallace v. Grubhub claim that the work of these drivers makes them employees rather than independent contractors. Wallace and Bryant argue that drivers work on scheduled shifts, and must work in certain area. "The drivers as a general matter cannot engage in personal non-work activities during their GrubHub shifts," the complaint states, meaning that they essentially function as employees. They also allege that they do not receive the same benefits that an employee does. Grubhub drivers are allegedly required to pay some of their own expenses. Because of how they are paid, the plaintiffs claim they may often paid below federal or state minimum wage, even when they work long hours. Many drivers allegedly work more than 40 hours a week but do not receive overtime rates for their work.

According to the Grubhub contractor lawsuit, the company violated a number of FLSA and Illinois laws by failing to pay overtime and failing to pay minimum wage. The plaintiffs filed their class-action Grubhub contractor lawsuit on June 29, 2018, in the U.S. District Court for the Northern District of Illinois.

Misclassifying workers like Grubhub delivery drivers as independent contractors may allow a company to avoid paying minimum wage, overtime pay, health benefits, insurance, and social security costs. Workers improperly classified in this manner may feel the need to take Grubhub and other companies in court and pursue litigation.[49]

Broderick and Carmen filed the lawsuit on behalf of themselves and all others in a similar situation and the case is ongoing.

Phone fees[edit]

In 2019, the company was sued for charging restaurants fees for phone calls taking place on Grubhub-issued phone lines lasting over 45 seconds—whether they resulted in orders or not. Grubhub agreed to extend the refund window for restaurants that have been unwittingly charged for phantom orders. The business itself must review and audit call logs within the refund window in order to identify and dispute fees erroneously charged to them by Grubhub's algorithm.[50][51]

Referral numbers on Yelp listings[edit]

Reporting from an August 2019 episode of podcast Underunderstood found that Yelp listings for some businesses provide Grubhub "referral numbers" which, when called instead of the businesses phone number itself, facilitate recording of the calls and can result in commission fees being charged to the business, even in some cases when resulting in no order.[52]

See also[edit]

References[edit]

  1. ^ "US SEC: 2018 Form 10-K Grubhub Inc". U.S. Securities and Exchange Commission. February 28, 2019. Retrieved August 12, 2019.
  2. ^ "Grubhub Reports First Quarter 2019 Results". The Grubhub Newsroom (Press release). 2018-02-08. Retrieved 2018-04-05.
  3. ^ "Grubhub Company Statistics". Grubhub.com. Retrieved 2018-04-05.
  4. ^ "Jason Finger of Seamless: The Random Idea That Sparked a $100M Business". OPEN Forum. May 6, 2013. Retrieved November 14, 2016.
  5. ^ "How I Did It: Matt Maloney of GrubHub and Seamless". Inc. October 31, 2014. Retrieved May 12, 2016.
  6. ^ Will Oremus (May 20, 2013). "GrubHub-Seamless Merger a Boon for Consumers Who Could Never Recall Which Was Which". Slate.
  7. ^ Fiegerman, Seth (April 4, 2014). "GrubHub Delivers Successful IPO as Stock Jumps 50% on Market Debut". Mashable.com.
  8. ^ Bhasin, Kim. "GrubHub's CEO On The Shock Of Outgrowing Three Offices In A Few Short Years". Businessinsider.com. Retrieved October 2, 2013.
  9. ^ "Grubhub.com Wins the University of Chicago New Venture Challenge". Prweb.com. Retrieved November 11, 2016.
  10. ^ "GrubHub Secures $1.1 Million in Series A Funding From Top Venture Firms". Prnewswire.com. Archived from the original on March 4, 2016. Retrieved November 14, 2016.
  11. ^ Rao, Leena. "Food Delivery Service GrubHub Secures $2 Million In Series B Funding". Techcrunch.com. Retrieved October 2, 2013.
  12. ^ Kopytoff, Verne (November 8, 2010). "GrubHub Gets a Cash Delivery". The New York Times. Retrieved October 2, 2013.
  13. ^ Rao, Leena. "Exclusive: Food Delivery Search Engine GrubHub Raises $20 Million". Techcrunch.com. Retrieved October 2, 2013.
  14. ^ "About Us". Seamless Corporate Accounts. Retrieved 6 February 2019.
  15. ^ Brustein, Joshua (September 20, 2011). "GrubHub Raises Another $50 Million, Acquires Dotmenu". The New York Times. Retrieved October 2, 2013.
  16. ^ "GrubHub Secures $50 Million and is Acquiring Campusfood and Allmenus". Reuters. September 21, 2011. Retrieved May 12, 2016.
  17. ^ Brustein, Joshua. "Seamless Acquires Menupages in Race for Restaurants". Bits Blog. Retrieved May 12, 2016.
  18. ^ Castellanos, Sara. "GrubHub acquires Brighton online restaurant delivery service DiningIn". Boston Business Journal. Retrieved June 8, 2015.
  19. ^ "UPDATE 2-GrubHub goes direct to diners after acquisitions", Reuters.com, February 5, 2015.
  20. ^ Amina Elahi (December 7, 2015). "GrubHub acquires Delivered Dish of Portland, Ore". Chicago Tribune.
  21. ^ "GrubHub acquires Delivered Dish of Portland, Ore". Chicagotribune.com. Retrieved May 12, 2016.
  22. ^ John Pletz (May 3, 2016). "Grubhub's stock dips on slower growth". Crain's Chicago Business.
  23. ^ "Grubhub to Buy Yelp's Eat24 for $287.5 Million". Inc. 4 August 2017. Retrieved 11 July 2017.
  24. ^ "Grubhub Completes Acquisition of Eat24" (Press release). Grubhub. 10 October 2017. Retrieved 5 February 2020.
  25. ^ "Grubhub Completes Acquisition of Eat24". Media.grubhub.com. Retrieved 6 February 2019.
  26. ^ Adams, Erika (29 July 2018). "https://table.skift.com/2018/07/29/grubhub-shuts-down-eat24/". Skift Table. External link in |title= (help)
  27. ^ a b "Grubhub Completes Acquisition of LevelUp". GrubHub. Retrieved 6 February 2019.
  28. ^ mcharles@stwnewspress.com, Michelle Charles. "Grubhub acquires OrderUp, expands into Stilllwater market". Stillwater News Press. Retrieved 2020-02-10.
  29. ^ "Grubhub acquires payments and loyalty company LevelUp for $390M". Social.techcrunch.com. Retrieved 6 February 2019.
  30. ^ "Grubhub Completes Acquisition of Tapingo". Media.grubhub.com. Retrieved 6 February 2019.
  31. ^ Tedeschi, Bob (June 13, 2005). "Ordering Takeout Online: A Dot-Com Idea Returns for a Second Try". The New York Times. Retrieved October 2, 2013.
  32. ^ "Aramark Corp. has acquired SeamlessWeb Professional Solutions, Inc". Food Management. Retrieved October 2, 2013.
  33. ^ "ARAMARK Sells Stake In Online Food Ordering Service SeamlessWeb For $50M". TechCrunch.com. June 8, 2011. Retrieved November 14, 2016.
  34. ^ Brustein, Joshua (September 26, 2011). "Seamless Acquires Menupages in Race for Restaurants". The New York Times. Retrieved October 2, 2013.
  35. ^ Ludwig, Sean (February 28, 2012). "Seamless brings super simple food ordering to the iPad". Venturebeat.com. Retrieved October 2, 2013.
  36. ^ Lazare, Lewis. "GrubHub and Seamless complete merger". Bizjournals.com. Retrieved November 14, 2016.
  37. ^ "GRUBHUB INC. (GRUB) IPO". NASDAQ.com. Retrieved May 12, 2016.
  38. ^ Transcripts, SA (May 3, 2016). "GrubHub (GRUB) Matthew M. Maloney on Q1 2016 Results - Earnings Call Transcript". Seeking Alpha. Retrieved May 12, 2016.
  39. ^ "Grubhub Delivery Adds New Markets Nationwide". investors.grubhub.com.
  40. ^ "Seen & Heard: Another GrubHub Seamless Scheme". Tribeca Citizen. April 6, 2016.
  41. ^ "Why Restaurants Hate GrubHub Seamless". Tribeca Citizen. March 1, 2016.
  42. ^ Finance (2015-02-10). "Here's the big stat GrubHub's new competitors covet". Business Insider. Retrieved 2017-03-07.
  43. ^ a b "Matt Maloney, Grubhub CEO, tells pro-Trump employees they have 'no place' in company". Washington Times. Retrieved November 14, 2016.
  44. ^ a b "Grubhub faces backlash after CEO's anti-Trump email to employees". Chicago Tribune. Retrieved November 14, 2016.
  45. ^ a b "Grubhub alienates Trump voters - time to sell?". Seekingalpha.com. November 15, 2016.
  46. ^ "GrubHub Inc. Common Stock (GRUB) Real-Time Stock Quote - NASDAQ.com". NASDAQ. Retrieved November 14, 2016.
  47. ^ "In Bellwether Gig Economy Case, Judge Rules Grubhub Driver Is Not an Employee". www.law.com. Cogan Schneier. Retrieved 8 February 2018.
  48. ^ Iovino, Nicholas (2017-10-31). "They're Not Employees, Grubhub Tells a Judge". Retrieved 2019-06-29.
  49. ^ "GrubHub Contractor Lawsuit Filed Over Failure to Pay Proper Wages". Top Class Actions. 2018-07-31. Retrieved 2019-06-29.
  50. ^ Dugan, Kevin; Fickenscher, Lisa (1 August 2019). "GrubHub extends refunds for fake fees amid pressure from Schumer". New York Post.
  51. ^ "Grubhub charging us even when our customers don't order: restaurant owners". www.nypost.com. Retrieved 19 January 2020.
  52. ^ "Recorded for Awesomeness". Underunderstood. Retrieved 19 January 2020.

External links[edit]