Grubhub's Playing The Long Game Against Dine-In
Last week we told you about how Grubhub operates like the Mafia, charging restaurants fees so high that we're surprised "protection" doesn't show up as one of the listed items. This week we see the fruits of Grubhub's administrative labor as they have reported record revenues despite thousands of restaurants closing up shop for good.
Grubhub has cruised to $363 million in revenues this quarter, but the real kicker here is they're barely breaking even. Now the true capitalists among us might be thinking, "If you rely on a nation-wide plague to barely break even, then you might have a bad business model," but then you'd be missing the point. Because the modern capitalists among us - the true true capitalists - would see that Grubhub only breaking even reveals the real plan all along. Grubhub is following the Amazon model. Its mission isn't to make money, at least right now. (Remember, it took years for Amazon to reach profitability.) Grubhub's mission is to crush whatever small businesses stand in their way until the landscape of dine-in and delivery changes and flows through Grubhub permanently.
Grubhub, of course, would deny this. Spokesperson John Collins said, "We only make money when [restaurants] do well. We want them to do well." But if that were the case, then Grubhub wouldn't "secretly be buying up thousands of domain names and using them to create shadow websites that competed with pages operated by restaurants" or be so opposed to commission caps that would allow restaurants to survive. No, the idea is for every restaurant to comply with the cartel-like practices of delivery services and if they can't, as many of them won't, then they'll die.
Some of you might say, "That's capitalism, baby. Only the best restaurants should survive," and while you'd be right, it's important to realize what you stand to lose. This isn't a battle between who makes the best pizza sauce. This is a winner-take-all cage-match between the concepts of delivery vs. dine-in. The restaurant that makes the best food or offers the best service isn't going to be who survives. It's going to be who can best effectively cut their costs to remain profitable for delivery. That means no waiters or dining rooms. That means restaurants being replaced by buildings with "kitchen spaces" as DoorDash has already begun to experiment with.
Will dine-in cease to exist once (if) the smoke clears from COVID-19, and it's safe to eat out again? That's hard to say. But it would stand to reason that if Grubhub and their ilk do manage to break the dine-in model, that any restaurants who remain are going to charge one hefty premium for us to stay in and eat. Because whether you realize it or not, the costs are always passed on to us.
Top Image: CarlCarlsonIV/Wiki Commons