Food blog

The Truth Revealed: How Grubhub Orders Impact Restaurant Profits

Here’s How Much Restaurants Really Make From Grubhub Orders

Ordering food from Grubhub has become a popular option for many people who want the convenience of dining out without leaving home. However, a recent investigation by the New York Times has shed light on the true costs associated with using food delivery platforms like Grubhub. The findings reveal that restaurants often make significantly less money from Grubhub orders than customers might expect.

The high cost of convenience

While Grubhub offers the convenience of having food delivered right to your door, it comes at a price. Delivery fees, service charges, and inflated menu prices can quickly add up, making a Grubhub order more expensive than eating out or even picking up the food yourself.
According to a New York Times investigation, a Grubhub order from Subway cost 25 percent more than buying the same meal in-store. In comparison, other food delivery services like DoorDash and Uber Eats mark up the same meal by 46 percent and 91 percent, respectively. These markups can significantly impact the overall cost of your meal, making you question whether the convenience is worth the price.

The grim reality for restaurants

While customers may assume that their money is going directly to support local restaurants, the reality is often quite different. One Chicago restaurateur recently shared his Grubhub statement on Facebook, revealing the shocking truth about his earnings from the platform.
Giuseppe Badalamenti, owner/operator of the Chicago Pizza Boss food truck, revealed that he only received $376.54 out of $1,042.63 worth of prepaid orders placed through Grubhub. This means that Grubhub took a staggering two-thirds of his profits, leaving him with only a fraction of the money he should have earned.
The situation becomes even more disheartening when you consider the additional costs incurred by the restaurant. Mr. Badalamenti pointed out that the amount he received wasn’t even enough to cover the cost of the food he prepared, let alone compensate him for his work. This revelation raises serious concerns about the viability of using third-party delivery services like Grubhub for restaurants.

False advertising and hidden costs

Adding insult to injury, it was discovered that Grubhub was promoting a $10 discount for customers as a way to support small businesses. However, the burden of this discount fell on the restaurants themselves. They were forced to absorb the $10 cost, further eroding their already slim profit margins.
Food writer Helen Rosner confirmed this practice in a recent tweet, highlighting the deceptive nature of these promotions. The promise of supporting small businesses through discounts ended up shifting the financial burden onto the very businesses they were supposed to help.

Reassessing the impact

The Chicago pizza boss’s revelations and the New York Times’ investigative report raise important questions about the true impact of using food delivery platforms like Grubhub. While they offer convenience to customers, the financial toll on restaurants can be devastating.
It’s important for consumers to be aware of these hidden costs and consider alternative ways to support local restaurants. Dining out, picking up food in person, or using other delivery options that have more favorable terms for restaurants may be more beneficial in the long run.
Ultimately, the goal should be to ensure that restaurants receive fair compensation for their products and services. Supporting local businesses should go beyond the act of ordering food and include making informed choices that contribute to their sustainability and success.

The future of food delivery

The issues raised by the Chicago Pizza Boss and the New York Times investigation call for a reevaluation of the food delivery industry as a whole. It’s imperative that platforms like Grubhub address the concerns of restaurateurs and work to create a more equitable system.
Restaurants are the lifeblood of communities, and their success directly impacts local economies. As consumers, we have the power to influence the industry by making conscious decisions about how we order food.
Finally, the convenience of Grubhub and other food delivery platforms can come at a significant cost to restaurants. By understanding the financial realities they face, we can make more informed choices and support local businesses in a way that truly benefits them. By reevaluating our reliance on third-party delivery services and considering alternative ways to order food, we can contribute to a more sustainable and equitable future for the restaurant industry.


Why are restaurants making less money on Grubhub orders?

Restaurants make less money on Grubhub orders due to several factors, including delivery fees, service fees, inflated menu prices, and the commission Grubhub takes on each order.

How much of the total order amount do restaurants typically receive?

The amount restaurants receive of the total order value can vary, but reports have shown cases where restaurants receive as little as one-third or even less of the total order value after discounts and fees.

Are there any additional costs for restaurants to use Grubhub?

Yes, restaurants often incur additional costs when using Grubhub. They may have to absorb discounts and promotions offered to customers, which can further reduce their profits.

Can restaurants refuse to work with Grubhub or similar delivery services?

Yes, restaurants can choose whether or not to work with Grubhub or other delivery services. Some restaurants may choose to opt out due to the financial implications and seek alternative ways to offer delivery or takeout.

What are the alternatives to ordering through Grubhub to support local restaurants?

To support local restaurants, consider alternatives such as eating out, picking up food directly from the restaurant, or using other delivery services that have more favorable terms for restaurants.

How can consumers make more informed decisions to support restaurants?

Consumers can make more informed choices by being aware of the hidden costs associated with food delivery platforms and considering alternative ways to order food that provide fair compensation to restaurants.

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