- Giuseppe Badalamenti, the owner of Chicago Pizza Boss, posted his March Grubhub earnings statement on Facebook, and it showed that the delivery platform took about 70% of its $1,000 earnings through the platform.
- “Stop believing you are supporting your community by ordering from a 3rd party delivery company,” Badalamenti wrote on Facebook.
- “Restaurant owners select the services they want and only pay a commission to Grubhub when we help generate sales,” a Grubhub spokesperson told Business Insider.
- Grubhub, which is part of the same company as Seamless, has come under scrutiny for asking users to oppose San Francisco’s order to slash its commission fees for restaurants from an average of 30% to 15%.
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Grubhub says it helps local restaurants. One email sent to customers reads, “Join us in supporting local restaurants during this difficult time.”
But an Illinois pizzeria owner caused a stir by posting a Grubhub earnings statement that shows the delivery platform taking the lion’s share of his delivery earnings. Giuseppe Badalamenti, who owns Chicago Pizza Boss in Westmont, Illinois, wrote, “Stop believing you are supporting your community by ordering from a 3rd party delivery company.”
The statement shows that out of a total of $1,042 generated by 46 orders through the platform, Grubhub took a $206.51 commission, a $94.99 delivery commission, a $38.52 processing fee, $231 for promotions, and $131.19 for a seven-order adjustment with $36.12 deducted. The seven-order adjustment refers to a $7 promotional discount that restaurants can choose to opt in to.
“Out of almost $1,100 of orders, your restaurant you are trying to support receives not even $400. It is almost enough to pay for the food,” Badalamenti wrote.
Guardian reporter Susie Cagle shared Badalamenti’s post on Twitter and described it as “nightmarish.” Cagle’s post garnered 17,000 likes and 7,700 retweets as of Friday afternoon, and Twitter users expressed their outrage in the thread.
—Susie Cagle (@susie_c) April 30, 2020
—Lisa (@notmuchelse) April 30, 2020
—David Thomas (@MrDavidThomas) April 30, 2020
—Jose (@BlueNGoldJoe) April 30, 2020
“Restaurant owners select the services they want and only pay a commission to Grubhub when we help generate sales. Grubhub is happy to work with restaurant partners to help them manage costs and grow their business,” a Grubhub spokesperson told Business Insider in an email.
The spokesperson also said that according to a study conducted by Grubhub, restaurant owners keep an average of 75% of their sales through the platform.
Some cities have enacted caps on the commission fees that third-party delivery platforms like Grubhub are allowed to charge restaurants. On April 24, Seattle passed an emergency order limiting those commission fees to 15%. When San Francisco passed a similar order in early April, Grubhub asked its users to oppose San Francisco’s order, saying that it would force the company to pass on costs to customers.
If you’re a restaurant owner who uses third-party delivery services, we’d love to hear about your experiences. Get in touch at email@example.com.