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Grubhub’s free lunch promotion creates literal ‘hell’s kitchen’ for New York restaurants – TechCrunch

Grubhub offered free meal to everyone in New York yesterday. What could go wrong?

Between 11 a.m. and 2 p.m., New Yorkers could use a Grubhub promo code to get a $15 lunch discount. Naturally, restaurants were inundated with an unexpected deluge of orders. According to Buzzfeed, a worker at a Mexican restaurant in Harlem delivered the orders herself via Uber because her in-house delivery driver was too overloaded. An employee at Greenberg’s Bagels in Brooklyn also told Buzzfeed that they get 50 orders in an hour, when they typically get about 10 orders from Grubhub a day.

Across New York City, Grubhub said it received about 6,000 orders per minute. Within an hour, some users tweeted that the promo code no longer worked or that restaurants had marked themselves as closed to stop receiving orders. Overall, many orders were delayed and/or canceled, but restaurant workers and delivery drivers were the hardest hit, struggling to fulfill orders at an impossible pace.

Grubhub said it modeled this promotion on a previous one, but this time customers used the promo code six times more, which caused surprisingly high demand.

“To help businesses prepare for yesterday’s promotion, we gave all restaurants in our network advance notice, which included multiple forms of email and platform communication,” Grubhub said. in a statement to TechCrunch. “Even with this preparation, no one could anticipate the level of demand and unfortunately this put a strain on some restaurants. We will undoubtedly learn a lot from this that can help us optimize and mitigate problems in the future. »

Clearly, many restaurant workers didn’t get the memo – and even so, taking proactive steps like adding an extra driver to a shift wouldn’t have prepared a restaurant to respond to a such a dramatic increase in demand.

This isn’t the first time a Grubhub promotion has inadvertently served short-term restaurants.

In March, DC Attorney General Karl Racine sued Grubhub for “misleading residents of the district and taking advantage of local restaurants to increase his own profits.” One incident the lawsuit referenced was Grubhub’s “Supper for Support” promotion at the start of the pandemic, which was halted. Launched in late March 2020, Grubhub offered restaurants the option to offer a $10 coupon on orders over $30, but the restaurant had to foot the bill for that free food. On the consumer side, Grubhub encouraged customers to “save while supporting restaurants [they] love,” even though their promotion actually put more pressure on restaurants by pushing them to cut their profit margins.

For yesterday’s promotion, Grubhub paid for the $15 coupon for customers, not restaurants.

Grubhub has also faced scrutiny and legal trouble for false advertising listing restaurants on its app without the company’s consent. This means that a consumer can place a Grubhub order for a restaurant that doesn’t even know it’s on Grubhub, meaning the business could be paying Grubhub a fee without knowing it. Or, once a Grubhub courier arrives, the restaurant may not even know they had to prepare that takeout order.

Despite an increase in delivery orders during the pandemic, food delivery apps are still struggling to generate profits. But customer acquisition promotions like yesterday’s are unlikely to encourage customers to come back to Grubhub.


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