As people around the country begin "social distancing" to limit the spread of COVID-19, restaurants are already seeing a downturn in business. In partnership with mayors from Boston, Chicago, New York City and San Francisco, Grubhub is stepping up to help its small restaurant clients.
Today, the company announced that it is temporarily suspending its commission fees (up to $100 million) for independent restaurants nationwide. According to CNBC, those restaurants sometimes pay commission fees as high as 30 percent on orders delivered by third-party companies like Grubhub.
It makes sense from a business perspective. Independent restaurants drive more than 80 percent of Grubhub's orders. If they are forced to close because they lose customers during the coronavirus pandemic, Grubhub will lose restaurants to serve. Some estimates predict dine-in traffic will slow up to 75 percent over the next few weeks. Pickup and delivery orders could help restaurants stay in business and prevent them from laying off staff.
"Independent restaurants are the lifeblood of our cities and feed our communities," Grubhub Founder and CEO Matt Maloney said in a statement. "They have been amazing long-term partners for us, and we wanted to help them in their time of need. Our business is their business -- so this was an easy decision for us to make."
Grubhub has also created a fund that will allow proceeds from its Donate the Change program to go toward charities supporting restaurants and drivers impacted by the coronavirus outbreak. Diners who round up the change on their orders will be able to donate it to the Grubhub Community Relief Fund. The company will match donations from Grubhub+ and Seamless+ members, and it will work with local city officials to select organizations that can use the funds.
"Banding together during hard times, putting people over profit, and supporting our local businesses is a model we should all follow, and I thank Grubhub for leading the way," said New York City Mayor Bill de Blasio.
Grubhub and other third-party food delivery services have begun offering no-contact delivery options, and they're sharing health and safety guidelines with drivers and diners. Other delivery and gig economy businesses, including Instacart, Lyft, Postmates and Uber, are considering ways to compensate drivers affected by the virus.