RUNNING HEAD GROUP PROJECT OUTLINE
Grubhub: Economic History, External Partnerships and Corporate Social
Responsibility
Group Project Outline
Michael Payne, Ryan Miccio, Terra Eidinger, David Brown
BMAL 504, Liberty University
2 August 2020
Author Note
Michael Payne, Ryan Miccio, Terra Eidinger, David Brown
We have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to David Brown
Email: dbrown240@liberty.edu
RUNNING HEAD GROUP PROJECT OUTLINE
Grub hub History and Background
The Chicago-based company known as Grubhub was founded in 2004 by Mike Evans, Roman
Gaskill, and Matt Malone. The initial goal of the company was quite simply to provide an
alternative to the traditional paper menus. In 2006, two of the company’s founders won first
place in the University of Chicago Booth School of Business's Edward L. Kaplan New Venture
Challenge with the business plan for Grubhub. The following year, November of 2007, the
company was well on its wat after securing a one-million-dollar investment to expand into cities
like San Francisco and New York. From 2009 to 2010, the company had raised more than 30
million dollars in investments and by March of 2011 Grubhub had secured some 50 million
dollars in investments. By 2015 the company had acquired several of its major competitors to
include such brands as Seamless, AllMenus, MenuPages, LevelUp, and Tapingo. These
acquisitions gave Grubhub a competitive edge as a result, more buyouts would follow from 2015
through 2017. The company began its delivery service for establishments that did not offer
delivery in 2016. At that time Grubhub was delivering in more than 50 markets across the United
States. Since February of 2020, Grubhub has revealed its launch of a new monthly subscription
service. The program offers free, unlimited food delivery from various partner restaurants for a
subscription-based fee. As July 24th, 2020, when the market closed the company’s capitalization
was more than 6 billion dollars.
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Processes of Change
The Chicago based company known as Grubhub came into the restaurant and food
delivery business for all intents and purposes, with a very singular mission; to dominate and
control market share. Sine its founding in 2004, Grubhub has taken the food delivery service
market by storm. The company has had a tremendous impact on the dining out experience and
the concept of having food delivered to the average consumer has become a multi-billion dollar
industry with few restaurateurs being able to compete, large or small, without providing some
sort of delivery service. Although the business does not exist in a vacuum, only a few companies
can compete and with the proliferation of COVID-19, individuals and business owners are
seeking new ways to stay safe and continue to conduct business. Our group will discuss
corporate social responsibility and how it influences external partnerships and If so, how. We will
also explore two processes of change: External Partnerships and the impact COVID-19 has had
on Grubhub
I. Often companies can have an arduous history of failing to connect with the people that
keep their business profitable. Doing good business outweighs the general expected profit
margins, diversification, productivity, and marketing. Corporate Social Responsibility
implementation is vital for today’s companies to meet the demands if the 21st century
consumer. This not only adds value to the external and internal structure of for-profit
organizations, but it creates good will throughout communities.
II. Grubhub has had its share of controversial issues, from labor lawsuits, questionable phone
order fees for restaurant owners to allegations of monopolistic behavior, however COVID-19
has arguably been one of the greatest hurdles for the company to address.
RUNNING HEAD GROUP PROJECT OUTLINE
“In France, Spain, and the United Kingdom, Just Eat and Uber Eats saw drops in average
daily users ranging from 2% to as much as 23% in March, compared with the averages for
January and February.” (Rzhevkina et al. 2020). Grubhub has additionally been accused of
predatory practices that force restaurants to give away free product and pay even more to
Grubhub than usual. The accusation is that Grubhub contributes nothing, while extracting
extra cash from restaurants they are professing to save.
III. The definition of external partnerships as it relates to Grubhub and how the company is
perceived can sometimes be difficult to define. Grubhub has since its founding been involved
in many buyouts and acquisitions. There have been allegations of arrangements that cause
restaurant owners to force dine in customers to subsidize the cost of delivery for other
consumers. Claims have asserted that Grubhub app charges exorbitant fees, that range from
13% to 40% of revenue, even while the average restaurant’s profit ranges from 3% to 9% of
revenue. Grubhub suggests in its 2019 Annual Report, “The Company generates revenues
primarily when diners place an order on its Platform. Restaurant partners pay a commission,
typically a percentage of the transaction, on orders that are processed through the Company’s
Platform. Most of the restaurant partners on the Company’s Platform can choose their level
of commission rate, at or above the base rate. A restaurant partner can choose to pay a higher
rate, which affects its prominence and exposure to diners on the Platform.” (Maloney 2020).
Some business owners take issue with this assertion.
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Reference List
Farrell, M. & Lombardo, C. (2019). Grubhub Considers Strategic Options Including Possible
Sale. Retrieved from The Wall Street Journal. Retrieved
from https://www.wsj.com/articles /grubhub-considers-strategic-options-including-
possible-sale-11578505832
Hirschberg, C., Rajko, A., Schumacher, T., & Wrulich, M. (2016). The changing market for food
delivery. McKinsey & Company, Technology, Media & Telecommunications. Retrieved
from https://www.mckinsey.com/industries /technology-media-and-
telecommunications/our-insights/the-changing-market-for-food-delivery#
Maloney, M. (2020). Grubhub 2019 Annual Report. Retrieved from https://s2.q4cdn.com /
772508021/files/doc_financials/2019annual/2019-Annual-Report.pdf
https://www.forbes.com/sites/stevedenning/2019/06/02/how-amazon-became
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Nicola, M., Alsafi, Z., Sohrabi, C., Kerwan, A., Al-Jabir, A., Iosifidis, C., Agha, M., & Agha, R.
(2020). The socio-economic implications of the coronavirus pandemic (COVID-19): A
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Rzhevkina, A., Russ, H., & Sterling, T. (2020) Online meal delivery firms knocked off course by
coronavirus crisis. Reuters. Retrieved from https://www.reuters.com/ article/us-health-
coronavirus-food-delivery-focu/online-meal-delivery-firms-knocked-off-course-by-
coronavirus-crisis-idUSKBN21P1IQ
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