As part of the Deliver On Your Business Podcast, we are looking at the four leading delivery companies and examining some of the pros and cons of working with each. This week, we'll get a look at Grubhub.
For the longest time, Grubhub was king of the mountain. It was only earlier this year that Doordash passed Grubhub in market share. Grubhubseems to me to be the best job of marketing and adding customers of any of the platforms. However, customer retention seems to be a bigger issue for them. Can they regain their dominance, or will they fade? They are a popular choice for couriers, will that popularity continue?
Is Grubhub a good delivery option? We'll look at some different aspects of delivering for Grubhub, and I'll add some of my thoughts and observations. In the end, it depends a lot on your market and your own preferences.
Looking at Grubhub, Uber Eats, Doordash and Postmates
Many of the upcoming episodes of our podcast, and associated articles on this blog, will focus on each of the four major carriers. We looked at if Postmates was a good option two weeks ago. In coming weeks we'll look at Uber Eats and Doordash. We'll focus on the following questions for each:
- How well do they pay?
- How does their app work?
- What are their deliveries like?
- Do they respect the Independent Contractor Relationship?
- What is their support like?
How is the Pay for Grubhub.
Grubhub did recently change up their pay model. As with Postmates, the overall pay with the new rate was reduced rather significantly. I get the impression that most drivers I come across perceive Grubhub to be the best paying option. For me, Grubhub makes up 75% of my business, so I couldn't argue. However, I'm seeing that shift lately.
Base pay with Grubhub
While Grubhub has a reputation for being a higher paying platform, their base pay actually seems to be lower than any of the others now. With the new pay model, their base pay breaks down to payment for estimated time and estimated miles. The good news is that they did take into account distance and mileage TO the restaurant, something that Postmates and Uber Eats do not do. However, their mileage pay is typically only 22-23 cents a mile depending on market which is well below the actual cost to operate your vehicle, and well below that of the other platforms. The disparity is especially high on longer distance deliveries, which seem to be far more common lately at least in my market. I would place them third out of the four (and possibly fourth, depending on how Doordash's new pay model shakes out).
Tipping with Grubhub
Tipping is the one area where Grubhub is, in my opinion, the undisputed king. Grubhub does a great job of encouraging tips when customers order, with a default tip rate set at 15 to 20% of order total. It is because of the higher tips on Grubhub that they still seem to be the most consistently high paying. Grubhub informs their drivers of the total amount an order will pay including actual tip amount, and that makes it easier for drivers to make an informed decision. They appear to have toyed with taking that information away from time to time, and may eventually move that way in an effort to get higher order acceptance. Customers cannot tip through the app after delivery but they can tip cash. I find that cash tips are fairly rare.
Incentives with Grubhub.
Grubhub probably does the least of the four apps to incentivize drivers to accept orders. In my experience it has only been in very extreme instances (such as the very highest demand periods or in bad weather) that they offer much on top of the delivery fees. They have been known to add bonuses to the delivery fee to make a low tip order more appealing. However drivers don't know it's a bonus until after the order has been delivered. Every once in awhile dispatchers have been known to call drivers to offer a bonus for picking up an order. Overall, Grubhub has been able to get by without offering as many incentives as the other platforms.
In the end, I find that during normal delivery periods, Grubhub is the most consistent and providing delivery offers with enough value. I do find that longer deliveries are far less profitable with them. During peak delivery times the other options tend to become more attractive. If someone were to decide they only want to focus on one platform, I find that at least in my market Grubhub remains the better and more consistent option than any of the others.
What about the Grubhub app?
I would place Grubhub solidly at number two out of the four main providers. The fact that you know the actual pay amount is an advantage over all the other platforms. The map on the offer screen shows where you are going. After accepting an order, you can look up the address of the customer. These things put them well ahead of Postmates and Uber Eats.
The biggest complaint I hear from other drivers about the information provided is the lack of a mileage total such as what Doordash provides. However, when you know your market well enough, you can know what you need to know from the map. My biggest complaint has been that lately, they hide customer specific information such as their original ETA and customer instructions until you mark that the order has been picked up. There are times where that can create some major issues when dropping off a delivery. This also makes it harder to know when a delivery you accepted is way behind schedule.
The function of the app.
For the most part, I find that the Grubhub app remains pretty stable. It doesn't seem to have some of the goofy glitches that I find with Postmates or Doordash. There have been a couple of major system wide outages, and sometimes I get the feeling that updates haven't been tested as well as they should be before being rolled out. Lately there's been a common issue with the app that many report where it will indicate that you seem to be offline, even though cell and data signals are very strong. There are times where I suspect that this interferes with the ability to receive orders, but I have no way to say for sure if that is the case.
My biggest issue with the app has to do with marking you have arrived and having GPS confirm it. If there is an internet dead spot at the restaurant or customer location, that can create a huge issue. That can lead to a time consuming call to support to mark an order as delivered. It can prevent you from knowing what you need to know when finishing a delivery. Either way, it can create major problems.
What are the deliveries like with Grubhub?
Generally, I have found deliveries to go pretty smoothly when delivering for Grubhub. It's usually no muss, no fuss. I've preferred them over other platforms that require you to order the food and wait for it to be ready. Grubhub orders have been historically all prepaid. That is changing though. Grubhub is in the process of sending out debit cards that drivers may have to use to place orders and pay for the food. That could be a game changer, depending on how that goes.
When it comes to prepaid orders, my experience in my market is that Grubhub has been at the bottom of the pile in this area. I find more wait time at restaurants for Grubhub orders than with anyone else. In a lot of cases, that lack of efficiency can offset the advantage they have of tending to have higher paying offers.
Dispatching, in my opinion, is horrible. With any of the other apps, when things are extremely busy, they are all pretty good at finding another order very close to where I”m dropping off. Grubhub is a totally different story. You know things are busy, you know they are swamped, and they are sending you offers for deliveries ten miles away from you. They seem to be more concerned about giving you an order that drops off close to you than they are where you can pick up somewhere close. I find that dispatching with Grubhub has the least respect for your distance and mileage of any of the apps.
I think one thing that really limits Grubhub in their dispatching is that they use a batched dispatch system. What that means is that their system doesn't put out offers on the fly as drivers come available. Their computer seems to evaluate everything, line up all the offers and then send them all out at the same time, every two minutes. That can create an issue because if you reject an order, you won't get one for another two minutes. It creates an issue for Grubhub as well because they can't send that order out to another driver for another two minutes unless a dispatcher manually submits the order to someone.
In the previous pay model, multiple orders were a bright spot for Grubhub. If you picked up two orders at a restaurant, you got the full pay for each order as if you had run them separately. Under the new pay model, they changed it so that you only get paid for the time and distance from the first drop off to the second. This often makes multiple orders less desirable. Probably the biggest issue with Grubhub in this area is that they are far from efficient. Grubhub is the worst of any of them, in my experience, at offering multiple pickups with the customers being several miles in the opposite direction of one another.
Does Grubhub Respect the Independent Contractor Relationship?
If you listen to me much, you know how I feel about these gig companies and their abuse of the independent contractor relationship. You also would know that I very much prefer to be an independent contractor. Unfortunately many of these companies fail to respect the boundaries that go with hiring contractors.
This is another area where I feel like Grubhub is at the bottom of the barrel. They put a lot of pressure on drivers to accept orders and tend to take a lot of punitive actions for drivers violating policies that were never communicated to begin with.
Grubhub and controlling drivers
A company cannot require a contractor to accept a certain percentage of offers. They cannot deactivate or terminate a driver's contract for failure to accept orders. Grubhub has found a workaround on that, by implementing a block scheduling system. Acceptance rate is the most prominent metric in whether you can schedule your blocks earlier than others. In some markets the blocks are in so much demand that you pretty much have to accept most deliveries in order to have the opportunity to deliver very much. It may or may not violate the letter of the law but definitely violates the spirit of the law.
I've often felt like Grubhub uses its dispatching to control and punish drivers more than it does to get orders completed. They've had their staff verbally state that more orders need to be accepted, but will never put that in writing. They seem to know all the right channels for spreading the word in just the right way to intimidate and bully drivers into compliance. It's their tendency to try to control drivers without actually admitting they are trying to control drivers that really lowers my opinion of them.
How is Grubhub's Driver Support?
This is one area where Grubhub definitely stands head and shoulders above the rest. That has more to do with the fact that the other platforms just didn't set the bar very high. Let's just say, they never set the bar to begin with.
Grubhub does have more support options than any of the others. It starts with having a Driver Specialist for a region. I'm not sure that this is necessarily a sign of Grubhub being supportive as much as it's a symptom of lack of respect for the independent contractor relationship. One of the main reasons you cannot find a similar position with other apps is that a company is not allowed to have a supervisory relationship with independent contractors, and they don't want to take the chance of breaching that. With Grubhub pushing the line when it comes to control, they don't seem phased. Having said that, I will admit appreciating having a particular contact, even though said contact is nearly impossible to reach.
Grubhub also has a team of people dedicated to driver support, and that is one area that has not yet, as of this writing, been farmed out to an overseas call center. They like to make it hard to access driver support, but there is a team. It is easier to contact someone if there is an issue than it is with any of the other apps.
Overall Impressions on Grubhub
You can probably tell, it's kind of a love hate thing that I have for them. They frustrate me the most but I earn the most with them. Maybe that makes sense when you think about it. On the one side, they are consistently the better paying option. On the other side, their dispatching and efforts to control drivers frustrate me.
This is my take: It's not a surprise that Grubhub has fallen behind Doordash for market share. I don't think it will be long before they fall behind Doordash in desirability for drivers. The bottom line is that Grubhub has a major customer retention problem. I think it's tied to the fact that they are not getting enough deliveries completed on time. Their response is to blame the drivers who are more selective on the orders they receive, and to try to control those drivers or force them into submission. If they could look at their processes and their dispatching first, they could fix a lot of the problems.
If Grubhub wouldn't take such an adversarial role with drivers who understand their rights and business requirements, Grubhub would become a slam dunk. But lately I've seen a lot of drivers who were fiercely loyal to Grubhub switch over to other platforms. However, if they continue to dispatch so inefficiently and tick off their customers, they will continue to lose market share. Eventually, earnings will be less consistent with Grubhub and they could lose their lead as the most desirable platform to deliver for. At least, that's how I see it.