GrubHub Doordash which has more customers

How does GrubHub work for customers, drivers and restaurants?

Food delivery apps are great when you don't have the hassle of cooking or when you want to feed a group of friends. However, thanks to the pandemic, demand is increasing and the best deployment apps in the industry are making more profit than ever before.

But does this mean that profits from these companies go to delivery partners and restaurants? Unfortunately, not always. In the past, major grocery shipping apps like Uber Eats have been pressured to lower their commission rates.

How does GrubHub compare?

What is GrubHub and how does it work for customers?

One of the top grocery delivery apps that are benefiting from the boom is GrubHub. Founded in 2004, GrubHub has grown to be one of the four largest delivery apps in the US alongside Uber Eats, Postmates and DoorDash. GrubHub serves hungry customers in over 3,200 cities across the country.

The way GrubHub works is similar to other popular food delivery apps. Download the app, create an account, and search local restaurants and eateries that partner with GrubHub for grocery delivery services. Alternatively, you can open an account on the GrubHub website and order your favorite dishes near you.

When you pay with GrubHub, you can choose from a variety of payment options, including debit or credit cards, PayPal, Apple Pay, eGift cards, or even good old fashioned cash on delivery.

Should you tip your delivery driver when your food arrives? This article may be able to help you.

How does GrubHub work for drivers?

People looking for an extra income can register with GrubHub as a delivery driver. Before you begin, however, make sure you have your own vehicle, a valid driver's license or identity card for cyclists, valid car insurance, and a smartphone. You must also be 19 or older to work for GrubHub.

When you have them ready, simply download the GrubHub For Drivers app from GrubHub or go to an account on the GrubHub For Drivers website and include the relevant documents above in your online application form.

After about a week, you will receive an email response from GrubHub informing you of the outcome of your application. If approved, receive a delivery bag and GrubHub T-shirt and you're good to go.

When you open the GrubHub For Drivers app, you will be taken to the Tasks page. Here you can toggle your availability from "Not Available" to "Accept Offers" to start working.

The app has a map that shows drivers where nearby delivery hotspots are. Drivers can drive to these locations to start meal delivery. For example, when Restaurant A confirms an order, the drivers in Restaurant A are notified that an order is waiting to be picked up and delivered.

How does GrubHub work for restaurants?

To keep their doors open, many restaurants are now partnering with food delivery apps. According to GrubHub, the company has over 245,000 restaurant partners in the US and processes more than 668,000 orders every day.

If you're a restaurant owner and want to get started with GrubHub, the steps to apply are similar and just as simple. Simply go to GrubHub's GrubHub For Restaurants page and enter your restaurant's name, zip code, and other details to get started.

A GrubHub sales manager will then ask for additional documents and a copy of your restaurant's menu. When all is clear, you can serve hundreds of hungry customers.

However, GrubHub charges a base commission fee of 10 percent, a marketing fee of 20 percent, and processing fees of 30 cents plus 0.35 percent for restaurants. With companies like GrubHub charging such exorbitant fees, restaurants have to raise their grocery prices for the apps to cover the cost.

This means that you, the customer, are essentially paying for every charge in the grocery supply chain: delivery fees, service fees, sales tax, advertising fees, and other miscellaneous fees to keep the business and its partners going.

Does GrubHub adequately compensate drivers and restaurants?

Like its competitors, GrubHub's employment and payment policies have come under scrutiny due to the surge in requests from delivery drivers in recent years.

GrubHub's delivery drivers are considered independent contractors in the USA. This means that they are technically self-sufficient, can stop their work at any time, and GrubHub doesn't have to pay for their federal unemployment and social security taxes.

GrubHub's payouts to delivery drivers are the total of the following categories:

  • Mileage per order
  • Time spent on the street
  • Mileage
  • Special bonuses known as Delivery Pay
  • Tips, of which they keep 100 percent

However, the exact amount of the delivery fee paid to the drivers is not specified.

On the flip side, restaurants see a large chunk of their revenue for third-party delivery apps like GrubHub. For many, their net income at the end of the day is just enough to cover overheads.

To address this, GrubHub recently rolled out a commission solution for restaurants.

If customers place an order through a direct link provided by a restaurant instead of the GrubHub app, the restaurant will not be charged the 20 percent marketing fee. However, we do not yet know whether this has had a positive or negative effect on the business of the GrubHub partners.

GrubHub For customers, drivers and restaurants

Does GrubHub pay each party fairly? It's difficult to say.

For delivery drivers, the payout depends heavily on the distance traveled, the time they spend in the hustle and bustle and the weekly or monthly challenges in the app. For restaurants, especially smaller businesses, while being on the platform has helped increase their visibility, it can still be difficult to keep things afloat.

Keep these factors in mind next time you browse your favorite restaurant menu in a grocery delivery app.

Call the restaurant directly to place an order for pickup. Or better yet, if you want to cook at home more often, check out our list of the best online grocery delivery services.