How does Grubhub make money? (all you must know)
Subsidiaries disclose: We may receive commissions for links in this article.
Over the past few years, Grubhub has grown into one of the largest food delivery services in the country.
So, if you’re wondering how the company does it, we looked at how Grubhub makes money, and here’s what we found!
How will Grubhub make money in 2022?
Grubhub makes money from various fees it charges customers and restaurants in 2022. Customers must pay a service fee when ordering. Restaurants have to give Grubhub some of the money they make on the platform. Grubhub doesn’t make money from tips, which go to the driver in full. Grubhub also makes money through the Grubhub Plus premium subscription.
Read on to find out everything you need to know about how Grubhub makes money, including what it takes from restaurants, what restaurants earn, and more!
What percentage of Grubhub?
Depending on the pricing plan the restaurant chooses, Grubhub charges the restaurant between 5% and 20% per order.
These fees are used for advertising or marketing, Grubhub charges for orders placed on its platform (website or app) and is the main source of revenue for restaurants.
Restaurants that get more marketing get priority in search results and receive more orders, but they have to pay higher commissions and vice versa.
If you find a restaurant on Grubhub, but place an order through its own website or by contacting it directly, Grubhub won’t know about it and won’t be able to get a cut of the restaurant’s pie.
There are three pricing packages on Grubhub, Basic, Plus, and Premium, which offer different benefits and fees.
Grubhub also charges restaurants an order processing fee for credit card processing and fraud monitoring.
If a restaurant chooses to use Grubhub’s delivery network instead of its own, it will also be charged a 10% delivery fee.
Restaurants with their own delivery network will only receive orders and customer addresses, which they can use to have food delivered to them without paying any delivery fees.
Grubhub’s supplemental delivery works with the restaurant’s internal delivery network to fulfill orders that go beyond its scope by taking over the transit and charging a fee.
If a customer chooses to pick up their food rather than have it delivered, the restaurant will not pay any delivery fees.
Grubhub doesn’t take any percentage of a driver’s tip, opting instead to let them keep 100% of your tip.
Is Grubhub profitable?
Grubhub is still not profitable, and neither is its seamless subsidiary.
Grubhub didn’t say when it expects to be profitable, but it probably won’t be anytime soon, as other major food delivery services aren’t profitable either.
Grubhub was acquired in June 2020 by Dutch food delivery company Just Eat Takeaway for more than $7 billion.
The acquisition comes as the company is going through a period of rapid growth during the COVID-19 pandemic.
Since then, however, Grubhub has fallen short of expectations and Just Eat Takeaway is actually considering a sale.
Just Eat CEO Jitse Groen said the company’s focus in 2022 is on profitability and strengthening the business, which gives us a clue as to how Grubhub is performing.
Do restaurants make money from Grubhub?
Restaurants make money from Grubhub, but how much they keep depends on the cuts the company takes.
As mentioned above, Grubhub takes between 5% and 20% of each order based on the amount of marketing done.
Grubhub never gets lower discounts at restaurants that aren’t advertised on the platform, but those restaurants also have fewer orders as a result.
Conversely, restaurants that get more promotions and priority searches on Grubhub get more orders, but they also have to pay higher commissions for marketing.
On top of that, Grubhub charges an order processing fee and a delivery fee, both of which cut the amount restaurants will ultimately receive.
A recent report detailed allegations that Grubhub barred restaurants from charging lower fees on other platforms, meaning they had to charge less for food but still deal with those fees.
How much does Grubhub make?
Grubhub’s revenue over the past few years is as follows:
- 2010 – $8.5 million
- 2011 – $30 million
- 2012 – $60 million
- 2013 – $170 million
- 2014 – $253 million
- 2015 – $361 million
- 2016 – $493 million
- 2017 – $683 million
- 2018 – $1 billion
- 2019 – $1.3 billion
- 2020 – $1.8 billion
To learn more, you can also read our post on Grubhub’s refund policy, how much to tip Grubhub, and when Grubhub will stop shipping.
in conclusion
Grubhub makes money from the fees it charges users, mostly service and delivery fees. Customers also have the option to purchase Grubhub Plus at a premium price. Grubhub doesn’t make money from driver tips because drivers receive 100% tips.
