Grubhub suggested free lunch to everyone in New York yesterday. What can go wrong?
From 11:00 a.m. to 2:00 p.m., New Yorkers could use a Grubhub promo code to get $15 off lunch. Naturally, the restaurants were inundated with an unexpected flood of orders. In accordance with buzzfeed, a Mexican restaurant worker in Harlem, delivered orders herself via Uber because their staff courier was overburdened. An employee at Greenberg’s Bagels in Brooklyn also told Buzzfeed that they are getting 50 orders an hour, while they usually get about 10 orders from Grubhub a day.
In New York, Grubhub reported receiving about 6000 orders in a minute. Within an hour, some users tweeted that the promo code was no longer working, or that the restaurants had marked themselves closed to no longer receive orders. In general, many orders were delayed and/or cancelled, but the most affected were restaurant workers and delivery drivers who struggled to fulfill orders at an impossible rate.
Grubhub said it modeled this promotion on the previous one, but this time around, customers used the promo code six times more often, generating unexpectedly high demand.
“To help businesses prepare for yesterday’s promotion, we have notified all restaurants in our network in advance, which included multiple forms of communication via email and on the platform,” Grubhub said in a statement to TechCrunch. “Even with this preparation, no one could have foreseen the level of demand and, unfortunately, this has put pressure on some restaurants. We will certainly learn many lessons from this that will help us optimize and mitigate issues going forward.”
Clearly, many restaurant employees didn’t get the memo — and even so, taking proactive action, like adding an extra driver to the shift, wouldn’t have prepared the restaurant for such a surge in demand.
This isn’t the first time a Grubhub promotion has inadvertently catered to restaurants.
In March, D.C. Attorney General Carl Racine sued Grubhub for “misleading the residents of the county and using local restaurants to increase their own profits.” One incident the lawsuit cites dates back to the early Grubhub pandemic era.Support DinnerPromotion that has been discontinued. Launched in late March 2020, Grubhub offered restaurants the ability to offer a $10 coupon on orders over $30, but the restaurant had to pay the bill for that free meal. On the consumer side, Grubhub urged customers to “save by supporting restaurants.” [they] love,” even though their ads are actually putting extra pressure on restaurants, forcing them to lower their profit margins.
In yesterday’s promotion, Grubhub paid customers a $15 coupon, not restaurants.
Grubhub has also faced scrutiny and legal issues due to false advertising. list of restaurants in your application without business consent. This means that a consumer can place a Grubhub order for a restaurant that doesn’t even know it’s on Grubhub, meaning that a business can pay Grubhub a commission without knowing it. Or, when the Grubhub courier arrives, the restaurant may not even know they were supposed to make that takeaway order.
Despite a surge in delivery orders during the pandemic, food delivery apps are still fought to make a profit. But customer acquisition promotions like yesterday’s probably won’t keep customers coming back to Grubhub.
Credit: techcrunch.com /