Grubhub? Uber eats? More like Groanhub and Uber Eeks

MONROE — A settlement with food delivery giant Grubhub and the state of Illinois could pave the way for similar measures in Wisconsin as local restaurants struggle with the same deceptive tactics used by other delivery apps, including posting restaurant menus without permission.

According to local restaurant owners and managers, UberEats is one of several delivery apps that integrate restaurant menus into their apps – the same activity that led to the Illinois investigation and settlement.

“UberEats illegally stole our information and used an old menu and added us to their app after we repeatedly told them we were not interested in using their platform,” said an online post from Monroe’s popular Horseshoe Saloon that attracted a lot of attention in a community known for its good local restaurants. “Now we have customers calling us saying they’ve placed an order and it keeps getting delayed.”

If someone orders through one of the major nationwide apps and the restaurant isn’t connected, the order falls through and the customer’s money disappears, said Gavin Jordan, co-founder of a local-only delivery service, Delivery Drive, which is available on the Apple App Store and above the Google Play Store for Android users.

“They charge customers fees and then have to try to get their money back through the app, but that never happens,” he said.

Delivery Drive was founded by Jordan and Kendall Paulson after Jordan spent time in the Madison market and wondered why none of the home delivery giant’s applications were offered in Monroe. Jordan also worked for Eat Street, a similar service serving the Madison area dining scene.

Meanwhile, the Illinois settlement reached with the Federal Trade Commission (FTC) requires the company to immediately remove unaffiliated restaurants from its listings. According to the Illinois Attorney General’s Office, Grubhub has added up to 325,000 independent restaurants to its platform since at least 2019 – without their permission.

“Our investigation found that Grubhub tricked its customers, deceived its drivers, and unfairly damaged the reputation and revenue of restaurants that did not work with Grubhub – all to drive scale and accelerate growth,” said FTC Chairwoman Lina M. Khan.

According to the Illinois AG, this is how the system worked in Illinois and probably in other states like Wisconsin that have not yet resolved the problem legally or in court:

● First, the complaint states, Grubhub was often the first result when Illinois customers searched for these restaurants online, discouraging customers from placing direct orders and paying the restaurant directly for delivery.

● Second, these restaurants were flooded with orders from Grubhub drivers, including for meals that they didn’t sell because they had no connection to Grubhub’s ordering system. Additionally, drivers could only pay with Grubhub credit cards, which were occasionally declined due to insufficient funds. This resulted in restaurants that had already prepared food not receiving refunds.

● Third, the complaint alleges that disgruntled consumers blamed unaffiliated restaurants for Grubhub’s outages when Grubhub drivers delivered food from those establishments late or in poor condition.

Grubhub also attempted to sell paid partnerships to restaurants in response to their requests to be removed from the platform, often removing restaurants only after threatening legal action, officials said.

Many Illinois restaurants complained to the company about these practices. However, the complaint alleges that rather than correcting their practices, Grubhub made them even more difficult for customers and restaurants to detect.

“The competitive harm also extends to the restaurants themselves, according to the complaint, because Grubhub’s service fraudulently diverts guests from the restaurants’ own delivery services,” the Illinois AG said in the statement.

Over at Pancho and Lefty’s in Monroe, customers have noticed Pancho’s menu showing up on delivery apps, but the restaurant isn’t receiving any of those orders, the owners say. In fact, they don’t deliver at all, even though 25% to 30% of their daily revenue comes from takeout orders – a trend that began and increased since the COVID-19 epidemic. However, according to the owners, the dining experience is best enjoyed in person with other members of the community.

“We have a nice, busy little restaurant and we want the food to be presented in the best possible way,” said Russ Brown, who owns the eatery with his wife, Nadine Brown. “Our restaurant is about serving people.”

Back at the Horseshoe, the Uber Eats menu issue has left a bad taste in customers’ mouths.

“I’m not sure what they’re getting out of this (other than) angry customers,” the Horseshoe post said. “The only place you can have our food delivered is on our local delivery service’s Delivery Drive app with Kendall and Gavin.”

Baumgartner’s Downtown was also listed on Uber Eats after a customer called wondering about the order status, according to owner Chris Soukup.

“They have like an old menu of ours there and it’s a little confusing,” he said. “I don’t understand what benefit they expect from this if we have nothing to do with them.”