According to a report from New Food Economy, the food delivery service Grubhub has been creating websites for its client restraurants, with those restaurants seeing an increased commission fee as a result.
New Food Economy goes on to say that Grubhub, along with its subsidiary Seamless, bought over 23,000 domains of restaurant names, with a good deal of those being variations of the same restaurant. The report goes on to say that some restaurants' websites were in fact in direct Google competition with their own shadow sites.
Restaurant owners who provided testimonies to New Food Economy say that Grubhub's shadow websites negatively impacted the institutions they were mimicking. By having these sites, Grubhub had customers believe they were ordering directly from the restaurant, which was true in the sense that customers still got their food, but also it would come with a commission fee cost to the eatery because the sites weren't officially affiliated with them. Additionally, phone numbers listed on Grubhub's website will lead to the restaurants, but technology utilized by Grubhub would allegedly flag the calls as an order, which also led to a commission fee. Relatedly, a lawsuit that was recently filed by a restaurant owner in Philadelphia alleged that Grubhub has been charging fees for calls where no order was placed, and which were simply inquiries.
As for Grubhub, they did provide a statement in defense of their business model to New Food Economy. That statement said:
“Grubhub has never cybersquatted, which is identified by ICANN as ‘generally bad faith registration of another person’s trademark in a domain name As a service to our restaurants, we have created microsites for them as another source of orders and to increase their online brand presence. Additionally, we have registered domains on their behalf, consistent with our restaurant contracts. We no longer provide that service and it has always been our practice to transfer the domain to the restaurant as soon as they request it.”
