Grubhub
Grubhub Inc. is an American online and mobile prepared food ordering and delivery platform that connects diners with local restaurants. The company is based in Chicago, Illinois and was founded in 2004. As of 2019, the company had 19.9 million active users and 115,000 associated restaurants across 3,200 cities and all 50 states in the United States. Grubhub Seamless went public in April 2014 and trades on the New York Stock Exchange under the ticker symbol "GRUB".
On June 9, 2020, Just Eat Takeaway, a European food delivery service, announced an agreement to buy Grubhub for $7.3 billion in stock.
History
Grubhub history
-based Grubhub was founded in 2004 by Mike Evans, Roman Gaskill, and Matt Maloney, to create an alternative to paper menus. Two years later, in 2006, Maloney and Evans won first place in the University of Chicago Booth School of Business's Edward L. Kaplan New Venture Challenge with the business plan for Grubhub.In November 2007, Grubhub secured $1.1 million in Series A funding, led by Amicus Capital and Origin Ventures for the purpose of expanding into San Francisco and New York markets. In March 2009, Grubhub earned $2 million in Series B funding, led by Origin Ventures and Leo Capital, which was followed by $11 million in Series C funding, led by Benchmark Capital in November 2010. $20 million in Series D funding was raised in March 2011.
Grubhub's portfolio of brands includes Seamless, AllMenus, MenuPages, LevelUp, and Tapingo. Seamless is an online and mobile food ordering platform for regional restaurants active in the U.S. and London.
In September 2011, Grubhub secured $50 million in Series E funding and acquired New York-based competitor Dotmenu, the parent company of Allmenus and Campusfood. Grubhub completed the acquisition of AllMenus that month. MenuPages was acquired by Seamless in September 2011.
DiningIn, an online ordering and food delivery company based in Brighton, Massachusetts, was acquired by Grubhub in February 2015. Restaurants on the Run, a corporate food delivery company based in Aliso Viejo, California, was acquired by Grubhub in February 2015.
In December 2015, Grubhub acquired Delivered Dish, a restaurant delivery service in seven markets across the Pacific Northwest and Southwest, including Denver, Las Vegas, San Diego, Portland, El Paso and Albuquerque. LAbite, a Los Angeles-based restaurant delivery service, was acquired by Grubhub in May 2016.
In August 2017, Grubhub entered into an agreement to acquire Eat24 from Yelp for $287.5 million, subject to regulatory review. In October 2017, Grubhub announced that had it completed its acquisition of Eat24. In late 2018 Grubhub shut down the Eat24 brand.
Certain assets were acquired from 11 franchisee-owned OrderUp markets in September 2018. Certain assets from 27 OrderUp markets had already been acquired in 2017. GrubHub completed its acquisition of OrderUp in October 2018.
LevelUp, a Boston-based diner engagement and payment solutions platform was acquired by Grubhub in September 2018. The acquisition of LevelUp was for a reported or $390 million cash. Tapingo, a San Francisco-based platform for campus food ordering was acquired by Grubhub in November 2018.
Seamless history
In 1999, New York lawyer Jason Finger founded SeamlessWeb to provide companies with a web-based system for ordering food from restaurants and caterers. Six years later, in 2005, SeamlessWeb introduced a free ordering service to consumer diners to complement the existing corporate-ordering service. In April 2006, SeamlessWeb was acquired by Aramark and integrated into its Food, Hospitalities, and Facilities segment.Jonathan Zabusky was named president of Seamless in 2009, and by June 2011, Seamless was re-privatized, as Boston-based Spectrum Equity Associates invested $50 million for a minority stake in the company from Aramark. The company then changed its name from SeamlessWeb to Seamless.
In September 2011, Seamless acquired MenuPages, and in February 2012, Seamless released an iPad app.
Grubhub and Seamless merger
In May 2013, Grubhub and Seamless announced that they were merging, with Seamless representing 58% of the equity and GrubHub representing 42% of the equity of the combined business; the merger was finalized in early August 2013.IPO
Grubhub went public in April 2014 at a price of $26 per share. It trades on the New York Stock Exchange under the ticker symbol "GRUB".Delivery
In June 2014, Grubhub began offering delivery for restaurants that don't operate their own delivery service. As of 2016, the company was delivering in more than 50 markets across the U.S. In July 2018, Grubhub announced that had it expanded its delivery capabilities to 28 new cities in the US.Grubhub's UK competitors are Deliveroo, Just Eat, and UberEATS. In the U.S. its competitors include Uber Eats, DoorDash, Postmates, EatStreet, Amazon Restaurants and Online Restaurants.
In February 2020, the company announced the launch of its new Grubhub+ monthly subscription program, which offers free, unlimited food delivery from partner restaurants for monthly fee.
Announced acquisition
On May 12, 2020, Uber announced that it was approaching Grubhub with a takeover offer. However, on June 9, 2020, Just Eat Takeaway announced it would be purchasing Grubhub for $7.3 billion in an all-stock deal. The acquisition would create the largest online food delivery service outside of China, and provide Just Eat Takeaway with a base in the U.S. market. North American headquarters would remain in Chicago with Grubhub founder, Matt Maloney, joining the board of directors and heading North American operations.Controversy
Labor lawsuits
''Lawson vs. Grubhub''
In February 2018, US Magistrate Judge Jacqueline Scott Corley found that Grubhub correctly classified plaintiff Raef Lawson as an independent contractor and rejected his misclassification claim in the Lawson vs. Grubhub court case.In a 2017 lawsuit, attorney Shannon Liss-Riordan said that the company uses words such as “blocks” instead of “shifts" to re-label words and create a false narrative to justify its misclassification of drivers as contractors.
''Wallace v. Grubhub Holdings''
The Wallace v. Grubhub Holdings contractor lawsuit alleges that Carmen Wallace and Broderick Bryant and other drivers were misclassified as independent contractors and Grubhub defied wage-and-hour requirements under the Fair Labor Standards Act, the Illinois Minimum Wage Law, and the California Labor Code.The plaintiffs in Wallace v. Grubhub claim that the work of these drivers makes them employees rather than independent contractors. Wallace and Bryant argue that drivers work on scheduled shifts, and must work in certain area. "The drivers as a general matter cannot engage in personal non-work activities during their GrubHub shifts," the complaint states, meaning that they essentially function as employees. They also allege that they do not receive the same benefits that an employee does. Grubhub drivers are allegedly required to pay some of their own expenses. Because of how they are paid, the plaintiffs claim they may often paid below federal or state minimum wage, even when they work long hours. Many drivers allegedly work more than 40 hours a week but do not receive overtime rates for their work.
According to the Grubhub contractor lawsuit, the company violated a number of FLSA and Illinois laws by failing to pay overtime and failing to pay minimum wage. The plaintiffs filed their class-action Grubhub contractor lawsuit on June 29, 2018, in the U.S. District Court for the Northern District of Illinois.
Misclassifying workers like Grubhub delivery drivers as independent contractors may allow a company to avoid paying minimum wage, overtime pay, health benefits, insurance, and social security costs. Workers improperly classified in this manner may feel the need to take Grubhub and other companies in court and pursue litigation.
Broderick and Carmen filed the lawsuit on behalf of themselves and all others in a similar situation and the case is ongoing.
Phone order fees
In 2019, the company was sued for charging restaurants fees for phone calls taking place on Grubhub-issued phone lines lasting over 45 seconds—whether they resulted in orders or not. Grubhub agreed to extend the refund window for restaurants that have been unwittingly charged for phantom orders. The restaurants themselves must review and audit call logs within the refund window in order to identify and dispute fees erroneously charged to them by Grubhub's algorithm.Political statement
On November 10, 2016, after the victory of President Donald Trump in the general election, Grubhub President and CEO Matt Maloney sent a company-wide memo to employees saying that he rejected "nationalist, anti-immigrant and hateful politics of Donald Trump". The Washington Times reported that Maloney "unleashed a political screed after the Nov. 8 election and said that those who disagree with its anti-Trump views should resign."After a Twitter boycott campaign was initiated, Maloney later claimed his words were "misconstrued", adding "I want to clarify that I did not ask for anyone to resign if they voted for Trump. I would never make such a demand. To the contrary, the message of the email is that we do not tolerate discriminatory activity or hateful commentary in the workplace, and that we will stand up for our employees." In a tweet that was later deleted, Maloney added: "To be clear, Grubhub does not tolerate hate and we are proud of all our employees - even those who voted for Trump." By Thursday night, the hashtag