Delivery service Grubhub has announced a temporary initiative to offset some of the impacts on independent restaurants struggling as a result of the coronavirus outbreak by suspending commission payments. But those deferred fees will still have to be paid back to Grubhub, a spokesperson confirmed to Gizmodo.
The company said Friday it is suspending its “commission payments” to restaurants up to $100 million for independent eateries, which Grubhub said make up the majority of the more than 350,000 that offer delivery through its service. A spokesperson for Grubhub said the relief effort will extend only to independent restaurants, rather than big chains. The spokesperson confirmed to Gizmodo that “commission payments” includes all changes these restaurants typically pay to the company.
Grubhub said it expects restaurant foot traffic to dip up to 75 percent in the coming weeks. These restaurants face a severe blow to cash flow they’d normally see from dine-in eating. With city and health officials advising social distancing to curb the spread of covid-19, many of these companies will likely be reliant on take-out and delivery orders to keep the lights on.
In addition to the relief effort, Grubhub said it’s enabled users ordering through its platform—as well those ordering through Seamless, which is owned by Grubhub—to round up the extra change on an order as a donation to a designated Grubhub Community Relief Fund to aid charities that support restaurants and drivers impacted by covid-19. The company said it will match these donations and work with city officials on determining the best organizations to receive those funds.
New York City Councilman Mark Gjonaj, who is chair of the small business committee, commended Grubhub’s move in a statement, citing “the devastating and door closing impact of the coronavirus pandemic.” Gjonaj added that his office is currently working with other food delivery companies to request similar actions.
“My office and I have already begun conversations with other third-party food delivery providers such as DoorDash, Postmates and Uber to ask them to reduce their fees and implement other relief measures as restaurants cope with an unprecedented loss in business,” Gjonaj said. “Based off of these initial conversations, I feel encouraged that they will do the right thing and put people over profits during this moment of crisis.”
Gizmodo reached out to these companies about whether they planned to institute policies similar to those announced by Grubhub this week. An Uber spokesperson said the company was considering a number of proposals. Postmates, meanwhile, introduced a pilot program in San Francisco earlier this week to “waive restaurant commission fees for new merchants in impacted markets, giving small business owners access to on-demand delivery at no additional cost.” A spokesperson told Gizmodo that the company is “in talks with both the New York City Council and New York based restaurant associations to potentially pursue an expansion” of that program there as well.
DoorDash did not immediately return a request for comment.
Gig shops were initially slow to respond to the potential economic and health impacts to businesses and workers as a result of the coronavirus outbreak—we’re talking “wash your hands and hope for the best” levels of negligence. But this week saw several companies step up to cover needed time off—as was the case with Uber, Lyft, and Amazon, for example—for independent contractors who don’t traditionally have the luxury of paid sick leave. It doesn’t fix the broken gig work system that empowers companies over workers, but doing the bare minimum to help mitigate the spread of the virus still counts.
Update 3/17/20: After publication, a spokesperson for Grubhub confirmed to Gizmodo that despite suspending the fees to restaurants, those restaurants would still be required to pay them. We’ve updated this post and the headline to reflect this information.