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Grubhub CEO Calls Out Delivery Rivals For Price Gouging; Stock Drops 14% On Earnings | Forbes

Grubhub CEO Matt Maloney, on the heels of a lukewarm earnings report that pummeled the company’s stock, criticized rivals DoorDash and Postmates for high service fees, extra costs hidden in menu markups and subscription programs he described as “bogus.”

“The problem is by egregiously price-gouging consumers, at some point, they will figure it out,” he told Forbes. “I trust the consumer, ultimately.”

In particular, he took issue with the service fees other competitors charge at the end of an order that drive up the price in addition to delivery fees. For example, a recent $30 dumpling order on UberEats had a $5.99 delivery fee tacked on, plus another $4.60 service fee and $2.68 in taxes, bringing the total bill to over $45 with tip. Grubhub, by comparison, doesn’t charge a service fee.

For now, customers seem to swallow the service fees in favor of the “novelty” of delivery, Maloney contends, but he argues that is likely to change when customers “wisen up” to the difference in cost structures between companies. Often, menu items vary in price between platforms depending on whether the company has a partnership with the restaurant. In a report released Tuesday by D. A. Davidson, which recommended buying Grubhub shares, the firm concluded that Grubhub and Seamless offered the lowest prices inclusive of delivery and service fees, but their food prices were on average listed higher than those on DoorDash and Postmates. (DoorDash declined to comment on Maloney’s remarks, Postmates did not respond to request for comment.)

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Grubhub CEO Calls Out Delivery Rivals For Price Gouging; Stock Drops 14% On Earnings.

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