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  • We Are a Marketplace That Sells Demand Generation, Says Grubhub CEO

    We Are a Marketplace That Sells Demand Generation, Says Grubhub CEO

    “We are a marketplace that sells demand generation,” says Grubhub CEO Matt Maloney. “We sell growth. That’s what our primary product is. We’re not a logistics company. We do logistics because we know that’s an end to get to restaurant growth and make money off our logistics. The gross margins on the logistics are not fabulous. The gross margins on the demand generation are fabulous which is why I differentiate between a logistics company and demand gen company. If you’re selling consumers, you’re selling growth, and you can charge a lot for that.”

    Matt Maloney, CEO of Grubhub, discusses with Jim Cramer on CNBC how Grubhub is in the business of driving growth for restaurants and is not just a logistics company:

    The American Public Has Just Adopted Digital Ordering

    This is our fifth anniversary of our IPO. The market now is ten times what I thought it was five years ago. It’s because the American public has just adopted digital ordering as their preferred way to engage with their local restaurants. We are not just marketing to Millennials. We are marketing on national television across all channels, all time zones, and hitting all segments. We just see that people realize that digitally ordering on their app or on their desktop is just easier.

    Of course, our ad campaign is working. I wouldn’t have it on TV if it wasn’t working. You think about it this way. You know your LTV, your lifetime value of your customer, once they start ordering we know that they’re lifers. They’re on forever. We can make that revenue model and then we know how much it cost to put the ad on there. So yes, over time, as people see the ad, more and more it becomes less and less effective. But we’re nowhere near our LTV.

    https://youtu.be/qpyVP-JhToc
    Grubhub National TV Commercial

    I have always been willing to be extremely aggressive investing in the future. Historically, I was bound by the amount of money I could invest. The reception of these communications just weren’t hitting the public and they weren’t working as well. Then around the third quarter of last year, we saw that we could spend way more than we had historically. I’m just talking about effectiveness. Spending it effectively. We came to the street on our third quarter earnings call and said we see opportunity and we are going long in the fourth quarter.

    Yum Made $200 million Investment – They Believe in Our Story

    People are going to say where’s the beef, the old Wendy’s commercial. They’re like show me the money. (We don’t have Wendy’s) but everyone talks to everyone in this industry. I think over time exclusivity is just not going to happen. (We have Yum) and Yum is the biggest restaurateur in the world. YUM is an incredible brand which includes Taco Bell, KFC, and Pizza Hut. They are very forward-thinking. They invest in technology a lot and they wanted to make a fundamental partnership and we wanted to understand what the brands needed from a partner.

    Yum made a $200 million investment because they believe in our story. We didn’t need the investment because we have a very healthy balance sheet. What it did it was really bringing the support of the young brand and the franchisees into Grub. As a tight partnership, we’re able to execute on technology and growth for them in a way that nobody else in the industry is doing right now. I totally disagree (that we aren’t making money from this partnership).

    We Are a Marketplace That Sells Demand Generation

    We are a marketplace that sells demand generation. We sell growth. That’s what our primary product is. We’re not a logistics company. We do logistics because we know that’s an end to get to restaurant growth and make money off our logistics. The gross margins on the logistics are not fabulous. The gross margins on the demand generation are fabulous which is why I differentiate between a logistics company and demand gen company.

    If you’re selling consumers, you’re selling growth and you can charge a lot for that. That’s the profitable side. Everyone else in my industry is a logistics company which has razor thin margins. One of my competitors said they’re the next FedEx. Do you really want to be the next FedEx? There’s the multiple that we can get as marketplaces and there’s the multiple that logistics companies can get.

    Everyone Would Prefer to Order Digitally

    I think that everyone in the country would prefer to order digitally than order on the phone. That’s why we acquired Tapingo. It’s an incredible acquisition because it gives us further scale on campuses. Tapingo is a pickup focused product. So here’s what you need to think about. We sell growth, we sell orders. I don’t care if that’s a pickup order, a delivery order, a self-delivery order, or a catering order.

    Everyone else in my industry only does delivery facilitated by that platform. Because we partner with the restaurants (which means) the restaurants are subsidizing part of our transaction fee, we are always cheaper. That’s what people don’t understand. There’s a lot of bait and switch pricing going on (from competitors).

    We Are a Marketplace That Sells Demand Generation, Says Grubhub CEO


  • Just Eat Takeaway Buying Grubhub For $7.3 Billion

    Just Eat Takeaway Buying Grubhub For $7.3 Billion

    European-based Just Eat Takeaway has entered a definitive agreement to buy Grubhub for $7.3 billion.

    In the wake of the coronavirus, online food delivery has seen increased growth as people have come to rely on such services, in lieu of dining in restaurants. Combining the two companies will increase their global footprint. Just Eat Takeaway already is the leading online food delivery service in three of the top markets: the UK, the Netherlands and Germany. Bringing Grubhub into the fold will give the company a commanding presence in the US, the fourth top market.

    Jitse Groen, CEO and founder of Just Eat Takeaway.com, said: “Matt and I are the two remaining food delivery veterans in the sector, having started our respective businesses at the turn of the century, albeit on two different continents. Both of us have a firm belief that only businesses with high-quality and profitable growth will sustain in our sector. I am excited that we can create the world’s largest food delivery business outside China. We look forward to welcoming Matt and his team to our company and working with them in the future.”

    Matt Maloney, CEO and founder of Grubhub, commented: “Combining the companies that started it all will mean that two trailblazing start-ups have become a clear global leader. We share a focus on a hybrid model that places extra value on volume at independent restaurants, driving profitable growth. Supported by Just Eat Takeaway.com, we intend to accelerate our mission to be the fastest, best and most rewarding way to order food from your favourite local restaurants in North America and around the world. We could not be more excited.”

    It should be interesting to see what the combined company can accomplish in the US.

  • Grubhub Rolls Out $30 Million Stimulus To Restaurants

    Grubhub Rolls Out $30 Million Stimulus To Restaurants

    “A $250 payment per restaurant (from Grubhub) doesn’t sound like a lot but it’s going to be a huge difference,” says Grubhub CEO Matt Maloney. “We’re looking at it as a stimulus almost because the way we’re rolling it out is a consumer gets $10 if they spend $30. So our $30 million dollars is going to transform into over $100 million dollars of food sales to restaurants across the country.”

    Matt Maloney, CEO of Grubhub, announces a $30 million stimulus to restaurants in a discussion on CNBC:

    Grubhub Rolls Out $30 Million Stimulus To Restaurants 

    A $250 payment per restaurant (from Grubhub) doesn’t sound like a lot but it’s going to be a huge difference. We’re looking at it as a stimulus almost because the way we’re rolling it out is a consumer gets $10 if they spend $30. So our $30 million dollars is going to transform into over $100 million dollars of food sales to restaurants across the country. That’s a big slug when everyone’s working really hard to try to put money in the hands of small businesses.

    It depends on the market (in terms of how many restaurants are still open). In early COVID West Coast markets, we saw a dramatic dip in restaurants that went off the platform. Now they’re starting to come back on. You have New York and Detroit that are in the throes of the crisis right now and so you’re they’re peaking with about 30 percent of the restaurants off. But remember, we’re having thousands and thousands of restaurants coming on the platform for the first time so we’re seeing about the same number in terms of net. It’s just a transition.

    Grubhub Triples Highest Restaurant Onboarding Month Ever

    Our teams are working around the clock. We tripled our most onboarding month ever of restaurants. We had 15,000 restaurants go live in March. We’re probably going to do more in April. It’s just an incredible intensity of need right now for restaurants. We’re doing everything we can to help them. With drivers, we launched contact-free pickup or drop-off. We also just launched, just last week, curbside pickup for the drivers to make sure there are two layers of protection.

    There’s plenty of work on Grub and I know there’s lots of work on other delivery platforms as well. We have our own stimulus for our drivers too. If they get impacted directly by COVID we’re paying them. I know other platforms are also. And, of course, the CARES Act just came through with a lot of relief for gig workers also. Everyone right now is all hands on deck trying to help the restaurants, the drivers, and everyone impacted through this economic and health care crisis. 

    Fundamental Economics Are Still Intact

    I am hoping for the best. I think that the fundamental economics of our society is still intact. There is a lot of demand right now for restaurants. If we can help restaurants get through the next few weeks or months, depending on how bad this is, they will come back, they will be there for our communities. If they can’t, then that’s going to be a real problem.

    What we’re seeing right now is as the crisis bottoms out in the market growth does start to come back in that local area. We’re seeing the crises (at different levels) around the country in different markets at different times so we’re trying to dynamically manage that situation on the ground.

    Grubhub Rolls Out $30 Million Stimulus To Restaurants, Says Grubhub CEO Matt Maloney

  • Nothing Short of a Revolution Happening in the Food Marketplace

    Nothing Short of a Revolution Happening in the Food Marketplace

    There is nothing short of a revolution happening in the food marketplace today and it is not a quiet one, says Walter Robb, the former co-CEO of Whole Foods. “It is disrupting things left and right, all the way up the value chain back into the farmer’s field,” says Robb.

    Walter Robb, former co-CEO of Whole Foods, discusses the revolution happening in the food marketplace in an interview on CNBC:

    Nothing Short of a Revolution Happening in the Food Marketplace

    There is nothing short of a revolution happening in the food marketplace today and it is not a quiet one. It is disrupting things left and right, all the way up the value chain back into the farmer’s field. For me, to see these (organic) brands and to see it show up at the Super Bowl, the biggest media stage of the world, is kind of an exciting thing.

    Some 75 percent of the food we eat is from 12 plants. Somebody’s woken up to that realizing, wow, there’s a whole lot of stuff that we can create from stuff we don’t even know yet. The Natural Food Expo, which is the next month in LA, 85,000 people are going to that show. This is where the energy and the edge of the food industry is at right now.

    We’ve broken into this area now where there’s an amazing amount of innovation with young companies and entrepreneurs. This is where the growing edge of the food industry is now. It’s not just natural and organic but it’s this innovation around new foods and new food types.

    Amazing Amount of Innovation With Entrepreneurs

    You have to build the tools to really understand your customer personally. I think it’s pretty exciting to see what’s happening. On the physical side, Walmart is doing a lot of things, Kroger is doing a lot of things, and Whole Foods is doing a lot of things to try to integrate digital and physical retail in a way that gives the customer a very rich experience.

    I do think in terms of the food service delivery, Grubhub has had phenomenal growth. What’s happened is the world has woken up to how exciting food is again. We kind of went along after World War two for a number of years with this kind of dull drum of production, just regular stuff with the major CPG brands.

    If you get a $5 latte and it’s probably a $5 delivery charge at what point does the customers say that’s a great value problem? I don’t know, but I think we’re going to find out. I do think this idea that the customer wants the convenience is here to stay and that they’re used to having that option. In some cases, they will choose it. Where that line is it’s too early to say exactly where they’ll say, that’s too expensive or that’s not a good deal.


  • Grubhub CEO Matt Maloney is an Idiot–Potentially Costing Company Millions–Trump Supporters Outraged

    Grubhub CEO Matt Maloney is an Idiot–Potentially Costing Company Millions–Trump Supporters Outraged

    Grubhub CEO Matt Maloney is dumb, dumb and dumber. After the election he sent a condescending, baseless, whacko email that gives the impression to his employees that if you voted for Trump or believe in Trump’s campaign message that you should send in your resignation. He even says that if Trumped worked there, many of his comments would have resulted in his immediate termination.

    Would Maloney also want anyone who agrees with Trump to immediately stop buying their service?

    On November 8, Grubhub was trading at $37.83 and now it’s at $35.25. That is nearly a 7% drop while the rest of the market hit historic highs. His dumb political statements have so far cost Grubhub shareholders $200 million. What an idiot. The Grubhub board should hold an emergency session and fire him in order to reassure their shareholders that their company is in good hands and to send a message to customers that political intolerance is unacceptable.

    Maloney has since produced a press release saying he is misunderstood. Baloney. He meant every word of what he said because he bought in like a child the nonsense narrative that Trump is a racist, homophobe, intolerant Nazi like figure.

    Meanwhile, Trump supporters on Twitter are appropriately bashing Maloney relentlessly, but in a much smarter way than Maloney slammed them:

    Here is his original email:

    SUBJECT: So… that happened… what’s next?

    I’m still trying to reconcile my own worldview with the overwhelming message that was delivered last night. Clearly there are a lot of people angry and scared as the antithesis of every modern presidential candidate won and will be our next president.

    While demeaning, insulting and ridiculing minorities, immigrants and the physically/mentally disabled worked for Mr. Trump, I want to be clear that this behavior – and these views, have no place at Grubhub. Had he worked here, many of his comments would have resulted in his immediate termination.

    We have worked for years cultivating a culture of support and inclusiveness. I firmly believe that we must bring together different perspectives to continue innovating – including all genders, races, ethnicities and sexual, cultural or ideological preferences. We are better, faster and stronger together.

    Further I absolutely reject the nationalist, anti-immigrant and hateful politics of Donald Trump and will work to shield our community from this movement as best as I can. As we all try to understand what this vote means to us, I want to affirm to anyone on our team that is scared or feels personally exposed, that I and everyone else here at Grubhub will fight for your dignity and your right to make a better life for yourself and your family here in the United States.

    If you do not agree with this statement then please reply to this email with your resignation because you have no place here. We do not tolerate hateful attitudes on our team.I want to repeat what Hillary said this morning, that the new administration deserves our open minds and a chance to lead, but never stop believing that the fight for what’s right is worth it.

    Stay strong,
    Matt

  • Uber Isn’t the Only One Getting Sued over the ‘Employee or Contractor’ Issue

    Uber Isn’t the Only One Getting Sued over the ‘Employee or Contractor’ Issue

    With the rapid growth of the so-called ‘sharing economy’, one of the biggest issues has been whether or not workers for services like Uber and Lyft are employees of contractors.

    Uber’s stance has always been that it’s a software company. Uber connects people wanting a ride to those offering a ride. It’s a logistics company. Uber simply connects third-party contractors with customers. Its drivers are independent contractors, not employees.

    This has been met with numerous lawsuits and some unfavorable (for Uber, at least) rulings from regulatory bodies.

    But it’s not just Uber that’s facing lawsuit over the employee or contractor question.

    Food delivery services like GrubHub, Caviar, and DoorDash are now embroiled in a class action lawsuit of their own.

    And it’s the same lawyer that’s going after Uber in San Francisco.

    From the Chicago Tribune:

    The complaints were filed in San Francisco Superior Court on behalf of the delivery drivers by Boston attorney Shannon Liss-Riordan, who is also representing plaintiffs in similar lawsuits against on-demand transportation companies Uber and Lyft. A federal judge in San Francisco certified the lawsuit against Uber for class action last month.

    The complaints filed against GrubHub and DoorDash are both class actions, while the Caviar complaint is a demand for arbitration on behalf of a San Francisco driver.

    Earlier this month, a court ruled the case against Uber could proceed as a class action.

    The lawsuit, which was filed in 2013 and fought by Uber all the way, questions the company’s classification of its drivers. The class of drivers says it should be considered employees, not contractors, which would entitle them to things like reimbursement of expenses, minimum wage, overtime pay, and more.

    A week later, the California Employment Development Department (EDD) ruled that a former Uber driver was in fact an employee, not a contractor. That’s not the first time a regulatory agency has done that.

  • Foursquare Adds Grubhub Seamless Food Delivery

    Foursquare Adds Grubhub Seamless Food Delivery

    Foursquare not only wants to makes it easier to find the food you crave, but has now taken steps to help you get it to your face with the most minimal effort.

    The company just announced that they have added GrubHub Seamless integration to their iOS and Android apps, as well as Foursquare.com. GrubHub Seamless is the product of a May, 2013 merger between two of the country’s most-popular food delivery facilitators, GrubHub and Seamless.

    “Searching Foursquare for where to eat tonight…from your couch? You’ll be happy to know that you can now find more than 20,000 GrubHub Seamless restaurants in hundreds of cities across the US without leaving the Foursquare app. Simply click on the GrubHub or Seamless icon and start placing your order. You don’t even need to put on pants (but that would be nice)!” says Foursquare.

    GrubHub/Seamless compatible restaurants will have one of the icons right under the “view menu” button. From there, you can order your food and pay with cash, credit, or PayPal.

    According to GrubHub and Seamless, the two merged to “create a combined company well positioned to drive more orders to restaurants, deliver a better experience for hungry diners and enhance services to corporate clients.” In 2012, the two companies logged $875 million in gross food sales – so people are definitely using their services. Foursquare has been trying to push itself as a legitimate competitor in the local search and discovery arena, and little partnerships like this serve that goal.

    Now, where are those pulled-pork nachos I ordered an hour ago?

    Image via Foursquare Blog