Grubhub suggested free lunch to everyone in New York yesterday. What can go wrong?
Between 11:00 and 14:00, New Yorkers can use the Grubhub promotional code to receive a $ 15 discount on lunch. Naturally, the restaurants were flooded with an unexpected flood of orders. According to Buzzfeed, an employee of a Mexican restaurant in Haarlem, was delivering orders herself via Uber, as their delivery driver was too busy. An employee of Greenberg’s Bagels in Brooklyn also told Buzzfeed that they received 50 orders per hour, while they usually receive about 10 orders from Grubhub per day.
In New York, Grubhub said he got around 6000 orders per minute. Within an hour, some users tweeted that the promotional code was no longer working or that restaurants had been marked closed to avoid receiving more orders. In general, many orders were delayed and / or canceled, but restaurant workers and delivery drivers were most severely affected, struggling to fulfill orders at an impossible rate.
Grubhub said it modeled this promotion after a previous one, but this time customers used the promotional code six times as much, causing an unexpectedly high demand.
“To help businesses prepare for yesterday’s promotion, we notified all the restaurants in our network in advance, which included many forms of email and platform communication,” Grubhub said in a statement to TechCrunch. “Even with this preparation, no one could predict the level of demand, and unfortunately this has caused tension in some restaurants. We will undoubtedly learn a lot from what can help us optimize and mitigate problems in the future. ”
Apparently, many restaurant employees did not receive the note – and even so, taking proactive measures such as adding an extra driver to the shift would not prepare the restaurant to face such a dramatic jump in demand.
This isn’t the first time a Grubhub promotion has inadvertently served short-end restaurants.
In March, County Attorney General Karl Racine sued Grubhub for “misleading county residents and using local restaurants to increase their own profits.” One incident mentioned in the lawsuit is Grubhub’s promotion since the beginning of the Support Dinner pandemic, which has ended. Launched in late March 2020, Grubhub offered restaurants the opportunity to offer a $ 10 coupon for orders over $ 30, but the restaurant had to pay for this free food. On the consumer side, Grubhub encouraged customers to “save while supporting restaurants [they] love ”, although their promotion actually puts more strain on restaurants, forcing them to cut profit margins.
For yesterday’s promotion, Grubhub paid a $ 15 coupon to customers, not restaurants. The company says it is fulfilled 400,000 lunch orderswhich, at $ 15 per pop, will cost the company $ 6,000,000 for something that was largely fucked up.
Grubhub also faces control and legal issues with counterfeit advertising, listing restaurants in their application without the consent of the business. This means that the consumer can order Grubhub for a restaurant that does not even know it is Grubhub, which means that businesses can pay a fee to Grubhub without knowing it. Or, after a Grubhub courier arrives, the restaurant may not even know they are expected to prepare this export order.
Despite the increase in supply orders during the pandemic, food delivery applications still have he was tormented to make a profit. But customer promotion promotions like yesterday’s are unlikely to encourage customers to keep coming back to Grubhub.
Grubhub’s free lunch promo creates a literal ‘Hell’s Kitchen’ for NYC restaurants