GrubHub / Seamless—the aggregation and delivery service that earns its money by eating away at the already thin profit margins of local restaurants—is accused of, well, finding a new and unusual way to eat away at restaurant profit margins, and it involves buying up tens of thousands of website domain names without restaurants’ permission.
The bizarre scheme, first reported on by New Food Economy, involves Grubhub purchasing rights to use URLs similar to the names of restaurants already listed on the platform and having them point to “shadow pages” that only serve to direct potential customers into their ecosystem. Combined, Seamless and parent organization Grubhub appear to hold the names of over 30,000 domains, though not all were reachable. Data compiled by New Food Economy indicates the company began buying up these domains around 2010 and has continued to do so as recently as May of this year.
What difference does it make if bryanscoolhouseofpizza.com is owned by me or by the platform where I’m likely to sell a lot of pies? Well besides the general creepiness of setting up websites for entities that are, ostensibly, your suppliers without asking them, GrubHub orders deduct a portion of an order’s revenue as a fee—something that the restaurant would get to pocket if you, say, requested the food via phone or their own online ordering system. Given the popularity of GrubHub, it’s not difficult to imagine the platform having a massive advantage in search rankings.
A good many of these restaurants may have no interest in setting up a website, and these Grubhub-only placeholder pages might be generating orders that wouldn’t have come in otherwise. Others compete directly with websites that already exist:
Take, for instance, Molly Hatchet’s Sub Shop in Daytona Beach, Florida. The real Molly Hatchet’s can be found at www.mollyhatchetssubshop.com. GrubHub’s page, purchased in December of 2018, is available at www.mollyhatchetssubshopdaytonabeach.com. The real Molly Hatchet’s has its own online ordering system that has nothing to do with GrubHub. The GrubHub shadow page for the shop displays a different phone number (because commission) and links only to GrubHub.
Reached for comment, a GrubHub representative told Gizmodo that the company “has NEVER cybersquatted,”—a term we did not use in our inquiry. “As a service to our restaurants, we have created microsites for them as another source of orders and to increase their online brand presence. Additionally, we have registered domains on their behalf, consistent with our restaurant contracts,” the spokesperson wrote, “We no longer provide that service and it has always been our practice to transfer the domain to the restaurant as soon as they request it.”