Posted: Mar 16, 2020
New York City (CNN Business)Thousands of American restaurants struggling to stay in business amid the nation's growing novel coronavirus pandemic have one less thing to worry about today, thanks to Grubhub.
Grubhub founder and CEO Matt Maloney announced Friday that his company is temporarily suspending the collection of up to $100 million in commission fees from local restaurants for whom it delivers across the nation as they deal with the coronavirus's economic onslaught.
Many Americans avoiding large crowds at the advice of local and national political leaders, as well as` officials from the Center for Disease Control and Prevention, have stopped eating out at restaurants.
Some of those restaurants have been forced to furlough staff members or temporarily close to stay afloat.
Grubhub provides delivery service to more than 350,000 restaurants throughout the United States, from local bistros to major chains such as McDonald's, Wendy's and Subway. The delivery service provider said locally-owned restaurants comprise more than 80% of its business.
"It's very important for us to support our restaurant partners," Maloney told reporters during a Friday press conference with Chicago Mayor Lori Lightfoot and a handful of local restaurant owners.
"We're prepared to delay up to $100 million in our revenue to help these restaurants be more solvent and help them fulfill their commitments to their staff, the majority of which are hourly workers who, unfortunately, will bear the brunt of this economic crisis," Maloney continued.
Grubhub is also using its "Donate the Change" program to raise funds for programs aiding local restaurants and delivery drivers affected by drops in business due to coronavirus.
The program typically raises up to $1 million a month from customers using the Grubhub app or website who round up their payment totals to the nearest dollar. That additional money goes to select charities supported by the company.
"From our perspective. this is a no-brainer," Maloney said. "Independent restaurants' business is our business. They have been amazing long-term partners for us, and we wanted to help them in their time of need."
Food delivery services like Grubhub, Uber Eats, Door Dash, and Postmates have all seen their business rise significantly in recent weeks, according to Lightfoot.
"The reality is less people are choosing to dine in [restaurants]," the Chicago mayor told reporters at the press conference. "Leading restaurants rely more and more on pick-up and delivery orders to keep their doors open and stay afloat. ... Online food delivery will only go up as people choose to stay at home and follow the guidance of social distancing."
Grubhub said it hasn't set a time limit yet on its fee suspension.
By Chauncey Alcorn
March 13, 2020
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