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Ithaca restaurants ask for end to GrubHub orders

Working late in the library, Cornell senior Luke Hartman opens a new tab on his computer.  He types in “www.grubhub.com,” and scrolls through menus before picking Jimmy John’s, one of his favorite restaurants. With a point and a click, he is notified that his food will be there in 20 minutes. Hartman, who uses the site often, is satisfied with the ease of the purchase.

“I use GrubHub like once a week… If I’m in a library and I’m already online doing work, it’s just 10 seconds, you’re at the GrubHub website and I can just order,” he says.

Some restaurants in Ithaca are not as pleased.  Sammy’s Pizzeria is just one of the restaurants who are asking students to stop using GrubHub.

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“GrubHub takes a huge commission.  It’s an absolutely outrageous commission and that other website is much more reasonable,” says Sammy’s manager, Jasmine Pourante.

The “other website” is a locally owned start-up called 247YOR.  According to Pourante, Sammy’s is being charged a 17-18% commission at GrubHub, the site that they have been using since it’s purchase of Campus Foods in 2011, which had been used previously.

Co-founder of 247YOR, Issam Jafee, says that they’re offering similar services for as low as 2%.  247YOR has attracted 25 restaurants in the two months they’ve been in business.  Jafee says the site is intended to help businesses make a better profit.

“[Every order] restaurants see from GrubHub, they are losing money on.  They do it for the publicity and to be exposed to the public and so people know they exist and can order online, but they are losing money on each order.”

GrubHub PR Associate Allie Mack argues that the amount Sammy’s pays is up to them.

“GrubHub fees start at 10 percent, but restaurants can elect to pay a higher percentage to gain visibility. It’s an auction-based model built on the idea that increased visibility translates to more sales for restaurants.”

Mack says that restaurants that use GrubHub are getting plenty of bang for their buck.  With a network of over 25,000 restaurants in more than 500 cities, GrubHub allows for exposure to countless diners, something she feels no one else can offer.

“It’s pretty easy to get upset when you’re paying more for one service than another one that you think does the same thing… The visibility that comes from paying a higher fee on GrubHub translates directly to more sales,” she says.

Pourante, however, says that they just need to make a profit.

“It’s really hard for restaurants to make a profit when they’re taking that much,” she says.  “If we get enough people to start order over the phone or using this other website, we’ll be able to keep our prices very reasonable whereas the more GrubHub orders we get, the more we have to raise prices or add different fees to offset the cost of GrubHub,” she says.

With students as their largest customer base, it becomes up to people like Hartman to make the switch, something he feels would be worthwhile.

“Brand recognition is there with GrubHub. Everyone uses it now…it’s going to be a tough transition,” he says.  “But if companies are raising the red flag and saying, “we aren’t going to use grub hub or else there are going to be price increases then I would definitely stop using [it].”

 

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