Dive Brief:
- Grubhub is offering diners in Chicago and New York City free access to its Grubhub+ program, which normally charges $9.99 per month, through mid-March, according to an email sent to Restaurant Dive. The program offers free delivery on orders of $12 or more.
- All partner restaurants in these cities are included in Grubhub+ at no cost during this time.
- With dining rooms closed in both of these cities, restaurants can only offer takeout and delivery, which includes service fees that could be cost prohibitive to some customers. Grubhub said it expects this offering to help send more takeout orders to restaurants impacted by these restrictions.
Dive Insight:
While Chicago and New York City passed delivery fee caps of 15% and 20%, respectively, earlier in the year, Grubhub said it wouldn't charge customers higher fees due to the impact of these caps. That puts it in contrast to other aggregators, such as DoorDash and Uber Eats, that have added customer charges following the addition of delivery caps in various cities. Although Grubhub's offering is temporary, it could help attract more customers and restaurant partners in two of its largest markets.
Colder weather has also made it more difficult for restaurants to maintain outdoor dining operations, with the channel temporarily suspended in New York City on Wednesday due to the region's biggest snowstorm of December. If more snow days like this were to occur, restaurants will have to lean more heavily on delivery channels, especially if customers don't want to venture out to pick up their meals.
In November, Grubhub partnered with The Greg Hill Foundation's Restaurant Strong Fund to provide a $2 million Restaurant Winterization Grant program to provide $10,000 grants for eligible restaurants in Chicago, New York City, Boston and Philadelphia. The company also created a Direct Order Toolkit in December to provide restaurant partners with online ordering buttons and QR codes that they could use on their websites.
Investing in tools and discounts appears to be helping generate more sales. Grubhub said in July it helped generate $200 million in incremental restaurant sales after it spent $100 million in supporting restaurants, drivers and delivery customers. An $85 million investment went toward offering coupons, reduced diner fees and increased advertising, while $15 million went to provide personal protective equipment for drivers and tamper-evident stickers.
