As Uber negotiates with Grubhub about a possible takeover, restaurants are expressing their distaste for the deal. Mom-and-pop eateries struggling amid stay-at-home orders are fed up with the big commissions charged by the delivery companies that can range as high as 30% on each order. And they're upset over the discount breaks given to big chains like McDonald's.
A merger would create the U.S.' largest restaurant delivery company. Grubhub now has about 300,000 U.S. restaurants on its app, while Uber Eats boasts over 100,000 in the U.S. and Canada.
Some big cities are taking action. New York City Council passed an emergency bill Wednesday to cap fees to 15% of an order for delivery services and 5% for non-delivery services like marketing. A day earlier, Chicago enacted rules requiring delivery companies to give customers itemized breakdowns that include commissions and service fees paid by the restaurants to the apps.
Grubhub can't afford to anger the restaurants because they make up the vast majority of establishments on its app. It is deferring up to $100 million of commission payments to a later date. For now, Uber Eats said it's waiving delivery fees for restaurants.