Grubhub’s New Call System Should be Taken With a Grain of Salt

August 13, 2021

Photo courtesy of The Boston Globe

Grubhub has announced a new call system that will roll out on the 23rd of this month, which will replace its previous customer algorithm with customer representatives. 

Up until last year, the company relied on a computer algorithm to manage phone lines dedicated to direct food orders to its restaurant clients. Unfortunately, the algorithm often resulted in charges of anywhere from $4 to $9 for any calls that lasted more than 45 seconds; the caveat was that restaurant owners would be charged regardless of whether an order was placed. Reports came out that Grubhub had essentially created shadow phone numbers and restaurant websites that would come up on search engines for anyone to mistake for the actual restaurant’s information; it had also been charging customers for calls even when they were just calling to check on an order or complain about one they had already received. Owners slowly caught on, and brought it to the attention of legislators, which resulted in a first systems change in January of last year.  

The second system was a direct response to pending legislative action, but it largely still included the same issues. Its charge scheme was even more unfounded, with no baseline for when or how much to charge a restaurant. Customers were only given 2 options when they called, either press 1 to place an order or press 2 for everything else. Grubhub made a series of claims regarding when it would charge restaurants – stating that charges would only arise if a customer pressed 1 and stayed on the line for more than 45 seconds – and ensured that they would neither charge customers who had recently placed a food order from the establishment nor customers who attempted to place an order from an establishment that was closed. The result, however, was that many of the suspicious practices from the first system were being replicated in the second. As such, the New York City Council passed a law prohibiting third-party food delivery services from charging establishments for telephone orders that do not result in a transaction. 

Fast-forward to last month and the Council passed a legislative package which included an extension of the aforementioned law until February of 2022. In response, Grubhub has unveiled a third phone systems change. This new system will have 3 options for customers: press 1 to place an order, 2 for questions about a previously placed order, and 3 for any other questions. Once 1 is pressed, customers will be routed to a Grubhub customer service representative who will identify they are placing the order on the customer’s behalf and submit everything electronically. 2 will route customers to a Grubhub Care team member and 3 will lead customers directly to the restaurant with no charge. 

According to Grubhub, the benefits of such a program are multifold. Their representatives will reportedly be trained to make the whole process faster and easier, while also staying transparent with customers about who they are and what they are doing. The new call service will not cost restaurant clients any extra money. Restaurants will still receive phone orders through this system just as they do from any other online order. In the event of a mistake from the representative, the restaurant will be reimbursed. The caveat, however, is that restaurant clients do not have the choice to opt-out of assisted orders – which is the main point of contention. 

Restaurants have been fighting for the option to opt-out of certain aspects of third-party food delivery services for months now, and this is yet another reminder that they stand no chance against multi-billion-dollar corporations. Their real, direct phone numbers will still be left out of Grubhub’s marketplace, further driving a divide between the restaurant and their client, and many will never even reach the restaurant given the vagueness of the 3rd option. Aside from this, restaurant owners are also worried about representative training, given they will be fielding calls for thousands of businesses but, in the event of any problems, the restaurant will likely be blamed; will these representatives really have all of the answers to every question? They also know that Grubhub’s intentions are not truly aimed at “making the ordering experience easier for restaurants and diners,” as a company spokesperson stated, but rather for financial and legal reasons. This service will allow Grubhub to rack in more fees from phone orders, which are vital because they bring with them invaluable customer data. Given Grubhub has been losing market share to its competitors since 2018, they “need the money.” Legally, this service will also help the company avoid legal troubles, following multiple lawsuits that were waged against it for charges that came about in transaction-less situations.  

Overall, the situation is nowhere near perfect. Not being able to opt-out is exactly why restaurants have been struggling to survive during the pandemic, and even before, and will continue to adversely affect them as they try to recover. Grubhub’s new system may sound like a real shift away from its previous services, however reading between the lines unveils a number of issues that potentially will, and can, arise. 

Founded by attorneys Andreas Koutsoudakis and Michael Iakovou, KI Legal focuses on guiding companies and businesses throughout the entire legal spectrum as it relates to their business including day-to-day operations and compliance, litigation and transactional matters.

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