Almost a month after news broke that Uber Eats and Grubhub had been negotiating a takeover deal, a deal has been reached. Grubhub will now be owned by
Uber Eats, ummm, Just Eat Takeaway.
Wait, what? Who is that?
What will this mean for Grubhub contractors? How will things change? What do we know about this new owner and what will it look like for those of us who contract?
Who Is Just Eat Takeaway?
And seriously, who would name their company that?
That name actually is the result of another large merger that happened recently in Europe. Just Eat was a major delivery player in the United Kingdom, and was only recently purchased late last year by Dutch delivery giant Takeaway. Takeaway was a food delivery leader in Germany and the Netherlands, and had also recently purchased the German operations of Delivery Hero and Foodarena. It seems a good fit, seeing how Grubhub established a lot of their growth in the delivery market by acquiring companies like Seamless and Eat24.
Takeaway’s acquisition of Just Eat was only recently fully completed when the United Kingdom gave final approval for the merger. To date the brands have operated seperately and likely will for awhile.
We are not as familiar with these companies as they do not have a presence in the United States. However, Canadian delivery company SkiptheDishes is a subsidiary of Just Eat. Interestingly enough, only last year SkiptheDishes had pulled out of the six United States markets where they operated, selling off those operations to…. Grubhub.
Why Didn’t Uber Purchase Grubhub?
Uber and Grubhub have been going back and forth for the past month. Reports were that they were getting very close to an agreed upon price. However, it appears there were two major sticking points.
In writing about the potential of a merger between Grubhub and Uber, I had mentioned that there could be a real problem getting the merger approved. I’ve seen this with telecom mergers, where if a merger might make one company too dominant over others it is less likely to get approved. Earlier in the day yesterday I was seeing reports that Uber will likely walk away from the deal because of concerns about those challenges.
When you have the number two and number three delivery companies merging and making up possibly 60% of the delivery market, it’s not going to happen without getting some challenges on the anti-trust side of things. There is always the possibility that this gets shot down from outsideMay article in the EntreCourier about possible merger between Uber and Grubhub
A report in Food on Demand noted that another issue was in the difference in business philosophy. The report noted that Uber had “genuine and significant concerns about Grubhub’s business practices.” In particular, cybersquatting and charging for certain phone calls were mentioned. According to the article, these were practices that Grubhub was insisting they be allowed to continue.
What will change for drivers?
Not for awhile anyway.
This is going to take some time to get approval from all the government entities. I don’t think that’s going to be a problem since Just Eat Takeaway isn’t active in the US. There’s a lot involved with integrating operations between two technology companies. I’m not totally sure there’s any integrating that has to happen now.
Matt Maloney will remain as head of operations in North America. That tells me that not much will change. I expect things at Grubhub to be pretty much business as usual. I don’t expect changes in policies, pay models or practices. Grubhub will be Grubhub, just with a new corporate headquarters.
The example of Skip the Dishes
When Skip the Dishes was bought by Just Eat in 2016, not much changed apparently. They continued to operate with their own branding and their own practices. In fact, Just Eat took much of that model and applied it to other markets.
Everything I hear says that there’s a lot of similarity between how SkiptheDishes and Grubhub do things. Skip uses scheduling blocks much like Grubhub does. It appears that they don’t have a transparent pay model. I also get the impression that Skip tries to be a bit more controlling of drivers’ behavior and compliance. For example, they require drivers to purchase bags from them or have their delivery bags approved by them.
Is a merger a good thing?
How do you feel about Grubhub as they are?
Here’s my take:
I believe that a merger with Uber would have made Grubhub better more than it would have made them worse. I feel like Grubhub is a bit shadier than Uber in their overall business practices. My opinion is that Grubhub pushes the envelope far more than Uber Eats does when it comes to controlling how we work. Uber’s ownership would have tempered some of the worst things about Grubhub.
Instead, I think we’ll just get more of the same. We have a company that has one subsidiary that tries to control their contractors a bit too much buying another company that tries to control their contractors a bit too much. I don’t see anything in the corporate culture of this new owner that’s going to temper any of the issues that I see with Grubhub. Matt Maloney will still be in charge of operations here. Take that for what you will.
It’s like the Who said a long time ago. Meet the new boss.
Same as the old boss.