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GrubHub Is Being Accused of Building Fake Restaurant Websites

Food delivery service GrubHub has been creating websites for its client restaurants, with those restaurants seeing an increased commission fee as a result, according to a report from New Food Economy.

New Food Economy’s report says that GrubHub, along with its subsidiary Seamless, bought over 23,000 domains of restaurant names, with a good deal of those being variations of the same restaurant. Some restaurants’ websites were actually in direct Google competition with their own shadow sites.

Restaurant owners who provided testimonies to New Food Economy say that GrubHub’s shadow websites negatively impacted the institutions they were mimicking. By having these sites, GrubHub had customers believe they were ordering directly from the restaurant–and customers did still get their food–but also it would come with a commission fee cost to the eatery because the sites weren’t officially affiliated with them.

Additionally, phone numbers listed on GrubHub’s website will lead to the restaurants, but technology utilized by the food delivery service would allegedly flag the calls as an order, which also led to a commission fee for them.

According to the NY Post, a lawsuit was recently filed by a restaurant owner in Philadelphia alleges that Grubhub has been charging fees for calls where no order was placed and were just simply inquiries.

Even though some restaurant owners praised GrubHub for increasing exposure for their businesses, an owner identified in New Food Economy’s report as Shivane M. explained how the service was detrimental to their establishment.

Shivane said that even when business was improving and doing well, it was still not profitable. After assessing costs, Shivane realized that the commission and promotional feed that was paid to GrubHub had been continuously rising. When they tried to sever ties with the service and just directly build a website, they learned that GrubHub had bought multiple domains of the restaurant’s name.

GrubHub responded to these allegations, providing a statement in defense of their business model to New Food Economy. That statement said the following:

“Grubhub has never cybersquatted, which is identified by ICANN as ‘generally bad faith registration of another person’s trademark in a domain name As a service to our restaurants, we have created microsites for them as another source of orders and to increase their online brand presence. Additionally, we have registered domains on their behalf, consistent with our restaurant contracts. We no longer provide that service and it has always been our practice to transfer the domain to the restaurant as soon as they request it.”


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