Grubhub experiences another roller coaster week; tech marriages erupt
Giving workers instant access to their pay could boost retention. Grubhub has a plan to address the bad press it’s been getting lately; and consolidation among tech providers in the industry is opening up new opportunities for restaurants.
Instant pay perk hooks employees
In the battle to retain hourly employees, restaurant operators are experimenting with a new kind of payment system that allows employees instant access to their earnings.
Los Angeles-based cupcake chain Sprinkles Cupcakes and quick-service franchisees are taking advantage of third-party payment companies like DailyPay. Operators say the perk helps to recruit and retain Millennial and Gen Z workers who have grown accustomed to on-demand services.
At Sprinkles, 31% of the chain’s 650 employees are enrolled in DailyPay. TOMS King, which owns and operates nearly 140 Burger King restaurants in Illinois, Ohio, North Carolina, Pennsylvania and Virginia, has nearly half, or 48%, of its staff on DailyPay.
“Cash flow is a big deal for employees who work in this business,” said Kimberly Ervin, executive vice president of human resources at Palatine, Ill.-based TOMS King, which has about 3,000 employees.
Sehrish Sayani, marketing manager at New York-based DailyPay, said the three-year-old company has about 500,000 workers enrolled in the service. The company said employers do not have to pay fees to offer the perk. Workers, however, pay a money transfer fee that ranges between $1.99 to $2.99.
“You can take out as little or as much [earned wages] as you want,” Sayani said.
Besides Sprinkles and Burger King, DailyPay also works with Taco Bell and Boston Market operators.
“Turnover in this business is extremely high,” said Ervin. “We’re hoping that [DailyPay] will help change that.”
Grubhub: highs and lows
Delivery provider Grubhub has come under fire by a contingency of New York-based restaurants in recent weeks. The third-party delivery company, one of the top two delivery operators in the U.S. by market share, has been accused of charging restaurants inaccurate fees on phone charges and creating fake restaurant websites.
Grubhub has repeatedly defended its position as marketing platform that works with, not against, restaurants. In early August, the company outlined new policies for examining phone order charges and promised to launch a series of round tables to foster dialogue between Grubhub and restaurants.
Not long after that was announced, however, Vice.com posted a report saying Yelp, which became a Grubhub marketing partner in 2018, is “screwing over restaurants by quietly replacing their phone numbers” in a scheme aimed at generating more commission fees to Grubhub.
The publication alleged that numbers listed for “Delivery or Takeout” on the Yelp site are owned by Grubhub. If an order is made through that number, it will trigger a commission fee to restaurants who contract with Grubhub.
Yelp and Grubhub representatives told Restaurant Hospitality that delivery and takeout orders originating from the Yelp app are not all routed to a Grubhub number. It’s only done for restaurants that agree to it, which is what Grubhub argued when it was accused this summer of creating fake restaurant websites.
“It’s our understanding that the restaurants with Grubhub referral numbers have a marketing and customer acquisition agreement with Grubhub, which allows the company to utilize referral numbers on third party partner sites like Yelp,” a Yelp spokesperson said.
Yelp said less than 2.5% of restaurants in the U.S. have a Grubhub referral number for delivery or takeout on Yelp.
“To be clear, the restaurant's direct phone number is the only one displayed on its business profile on Yelp,” the consumer review site said.
Grubhub reiterated, saying “referral numbers are only used for some Grubhub partner restaurants.”
The delivery operator said restaurant orders coming through the Yelp referral number are charged the same fees as those coming through the Grubhub app.
In other words, fees should not come as a surprise to restaurants who agree to these services.
"The commission rate paid by the restaurant is the same for online orders or phone orders on Yelp as online orders or phone orders on Grubhub," the company said.
Mergers and marriages
An increasing number of restaurant software companies are partnering or merging to offer all-in-one services.
The latest: Ordermark and Omnivore have partnered to bring integrated delivery ordering to restaurants across the country.
The partnership allows Ordermark, which aggregates multiple online ordering services for restaurants, to integrate with Omnivore’s POS systems, both companies announced in August.
Ordermark is based in Culver City, Calif. and was developed by a member of the family that founded and operates Canter’s Deli in Los Angeles.
“This addresses over 85% of venues in North America to bring every delivery service to restaurants in any zip code, to cost-effectively add revenue and marketing reach to their online presence,” Ordermark said in a statement.
Delivery company Waitr also announced an integration partnership with digital food ordering platform Olo. The partnership will enable fully integrated ordering and delivery through Olo Rails, a solution Olo provides restaurant clients who want delivery orders injected straight into their POS, instead of a countertop tablet.
Orders now placed on the Waitr and Bite Squad apps will soon flow directly into the POS system at the restaurant, creating a seamless experience for operators, both companies said.
And finally, Paytronix Systems Inc., which provides restaurants customer data by aggregating orders from a variety of platforms, announced the acquisition of boutique delivery company Open Dining. Paytronix will continue to operate under the same name. Open Dining's new name is Paytronix Order & Delivery.
Contact Nancy Luna at [email protected]
Follow her on Twitter: @fastfoodmaven
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