Grubhub Denies Allegations Of ‘Fake’ Web Domains

Delivery giant Grubhub has been accused of creating websites for restaurants without their permission and trying to squeeze extra commission from it, according to a report by the Los Angeles Times.

The company’s Chief Executive Matt Maloney called the allegations “outright false,” saying that according to the terms and conditions, the company was allowed to purchase web domains and create websites advertising the restaurants it used.

It was recently reported that Grubhub registered around 23,000 web domains without the consent of restaurant owners. The move was perceived as an attempt to get a larger share of commissions and to block restaurants from building their own online presence.

“We do not set up websites without the permission of a restaurant,” Maloney wrote in an email to employees, according to the Times report. “We had a very clear provision in every one of our restaurant contracts saying we would provide this service to bring them more orders.”

Maloney also said the company stopped auto-making websites for restaurants last year, and that orders charged through those websites cost less than those ordered through Grubhub. He added that he turned over ownership of those websites back to the restaurant owners when requested.

“The allegations are untrue,” he wrote. “And those spreading false narratives are being reckless.”

The Times investigated the language in the contracts between Grubhub and restaurants, and found that the contract says Grubhub “may create, maintain and operate a microsite (‘MS’) and obtain the URL for such MS on restaurant’s behalf.”

However, simply stating that people should have read the fine print does not change the fact that many restaurants don’t like the commission rate charged by the company, which can range from 13 percent to 30 percent.

Sharokina Shams of the California Restaurant Association said the lack of transparency and communication from Grubhub was a big problem. “It seems like every time we hear from restaurateurs about their experience with third-party delivery services, words like ‘rip-off’ and ‘gouging’ come up,” she said.