
Grubhub stock halted after report Uber is eyeing a takeover - uptown
https://www.cnbc.com/2020/05/12/grubhub-stock-halted-after-report-uber-is-eyeing-a-takeover.html
======
cheungyinglon
If you live in NYC and care about local restaurants, there's a nonprofit that
helps you to easily find restaurants still open for pickup / delivery and to
order directly: [https://www.eatnyc.org/](https://www.eatnyc.org/).
Restaurants keep 100% of what you pay, so it really helps our favorite
restaurants stay alive.

They have solid coverage in NYC, especially Manhattan.

~~~
sgarman
Is there an SF version?

~~~
calciphus
Google maps has "takeout" as a search term, with filter by cuisine, open now,
price range, distance. Plus you can usually see the menu and contact info and
reviews not manipulated by Yelp sales people.

------
ravenstine
I hope they keep GrubHub and Uber Eats separate, because UE has way stingier
customers than GrubHub, in my experience. Something about the Uber brand seems
to bring about all the no-tip Taco Bell orders from across town.

Uber is also more likely to play psychological game with its drivers. It's
been a while since I drove for these services, but I remember GrubHub being
pretty straight forward with how much you are getting paid. I think Uber hid
the tip amount until you picked up the food. I imagine their driver support
would be abysmal.

~~~
vmception
I'm stingier on Uber Eats because there are so many fees! But I haven't used
Seamless since 2015 so I don't know if the same happens there nowadays.

All I know is that my $13 food choice costs me $22 when I go to check out, and
I think twice about it, then check the promos, and then consider the price of
just pickup, or order something else (lower price, or different restuarant
with different delivery fees, or maybe add a $2 item to remove the $3 small
order fee)

You price according to what the market can bear, as a participant of the
market this has stretched the rationalization of what I am willing to bear,
and if it isn't economically viable then maybe lay off 3,700 employees and buy
the leaner competitor, crazy idea right

~~~
helen___keller
GrubHub tends to lean more on merchant costs (like commission) than consumer
fees. This is why lately you may have seen (a) scary looking news articles
about GrubHub taking half of a restaurants income, and (b) cities talking
about emergency orders to limit commissions.

But either way, the economics are roughly the same: getting food made and
delivered to your door is really really expensive. It just comes down to how
that gets sliced between restaurant, consumer, and driver.

~~~
und3rth3iP
I'm in a suburban/semi-rural setting and have found Uber Eats to be more
reliable than Grubhub in most cases. It seems like UE might open up GH to more
of these markets where restaurants have been slower to warm up to working with
a service like GH than restaurants in an urban center.

------
russellbeattie
The pandemic finally broke my online food ordering habit, which was getting
_ridiculously_ expensive over the past year. Along those lines, I refuse to
support Uber in any way as I loathe Uber's company culture. So Seamless
(GrubHub) will be an instant uninstall if they are unfortunately bought by
Uber. Which will continue to help curb my bad habits.

So bad things can be good, I guess...

~~~
mattzito
Seamless is just as bad:

[https://www.theverge.com/2020/1/29/21113876/grubhub-
seamless...](https://www.theverge.com/2020/1/29/21113876/grubhub-seamless-
fake-restaurant-listings-no-permission-postmates-doordash)

[https://www.theverge.com/2019/6/28/19154220/grubhub-
seamless...](https://www.theverge.com/2019/6/28/19154220/grubhub-seamless-
fake-restaurant-domain-names-commission-fees)

[https://www.eater.com/2020/3/31/21201207/restaurants-pay-
gru...](https://www.eater.com/2020/3/31/21201207/restaurants-pay-grubhub-
discount-support-for-supper)

[https://www.eater.com/2020/5/1/21243966/giuseppe-
badalamenti...](https://www.eater.com/2020/5/1/21243966/giuseppe-badalamenti-
chicago-pizza-boss-shares-grubhub-earning-statement-on-facebook)

~~~
lilyball
_Nobody_ is as a bad as Uber.

~~~
koolba
Uber has been staunchly pro-consumer. Their antics and legal shenanigans were
always going up against either the local government or their drivers.

As a customer I’ve never had a complaint about their service outside of the
asinine decision to add tipping.

~~~
Marsymars
> Uber has been staunchly pro-consumer.

They don’t let you use their app without adding a credit card, even if you
have more than sufficient credit with Uber to pay for a ride.

~~~
what_ever
That's a pretty minor thing to hold against. A rider can cause any number of
issues in the car including a very common issue of throwing while returning
from a drunken night. How do you charge that person then? Lot of companies
also use credit cards to tie account to a person so they don't abuse the
initial sign up bonuses.

~~~
Marsymars
Yes, that is a relatively minor thing, but it remains a way that despite being
"staunchly pro-consumer", they're less pro-consumer than traditional taxis.

> How do you charge that person then?

They could require a credit with Uber sufficient to cover that charge if
someone wants to take a nighttime Uber ride.

> Lot of companies also use credit cards to tie account to a person so they
> don't abuse the initial sign up bonuses.

Yeah, but still, companies tracking purchases via credit cards is definitely
not "pro-consumer".

~~~
what_ever
If that's what we start calling pro-consumer companies then you will hardly
find any pro-consumer companies. I can't even think of a company that is
"perfect" if you are taking issues with such things.

~~~
Marsymars
I don’t have any anti-consumer complaints to make about my local pizza joint.

------
koolba
GrubHub would be wise to take the money and run. If it’s cash bank it. If it’s
stock, buy some Uber puts.

The economics of last mile delivery can not justify these valuations so if
Uber thinks they can make it happen with driver downtime then grab the cash
while you can.

~~~
lawnchair_larry
I’m pretty sure you can’t take a short position against the interests of your
own company. That’s boilerplate language in the deals I’ve seen, for obvious
reasons.

~~~
yellowstuff
Carl Icahn _may_ have found a way around this kind of restriction after the
Lyft IPO by selling in a private transaction to someone who hedged in advance
of the sale, although it's not at all clear what really happened.

[https://www.bloomberg.com/opinion/articles/2019-05-07/lyft-s...](https://www.bloomberg.com/opinion/articles/2019-05-07/lyft-
s-ipo-was-a-little-awkward)

------
anthony_r
The short seller's biggest annoyance. Jim Chanos is probably pissed off right
now that another good short will be bailed out with private capital.

Uber has $9B cash on books in their latest 10-Q. I wonder if they'll burn some
of that or will they issue new securities to finance this. It feels a little
reckless to abandon half of your savings, especially as your cost of capital
was just marked up and uncertain times are ahead.

~~~
rmrfstar
It's about establishing a monopsony for contract drivers. Uber and Lyft are
duking it out for those monopoly dollars.

------
ceejayoz
Does Grubhub have any special sauce, or would this just be a direct
acquisition of market share?

~~~
deminature
Enormous marketshare on the East Coast of the US both on the restaurant and
customer side, due to operating there for 20yrs. GH also has 10-20% share in
most cities, so this acquisition would put Eats comfortably ahead of their
main competitor DD.

~~~
ceejayoz
Wow, I had no idea Grubhub has been around since 2004!

~~~
alteria
GrubHub is also public, and therefore has a harder time burning piles of cash
compared to its competitors (looking at you, DoorDash).

------
MattGaiser
Something is going to need to give in food delivery because nobody is making a
profit on it.

Restaurant loses money on the percentage.

Driver loses money on the vehicle depreciation much of the time.

The delivery company loses money on the delivery.

I just don’t think a burger can be profitably delivered 15 minutes away for
1.99.

~~~
jacobr1
What do the economics look like for the old Pizza or Chinese delivery places
in a pre-app world?

~~~
jcdavis
Ancedotally (I don't have a ton of concrete details here):

1\. From what I understand restaurants doing delivery largely were breaking
even on it considering the costs - there was no third party looking to take
20-30% of the gross.

2\. Again anecdotally, I suspect the old school pizza/chinese delivery places
are more efficient in terms of deliveries per driver per hour. What I see with
a lot of UberEats/Grubhub etc is drivers waiting a lot at restaurants,
bouncing around a bunch to pick up one or 2 orders each. Vs the old-school
pizza model of a driver being able to pick up a bunch of orders at once.

~~~
kiwidrew
> the old school pizza/chinese delivery places are more efficient in terms of
> deliveries per driver per hour

Precisely this! It's amazingly inefficient to dedicate an entire person (and
their 1000kg car) for the delivery of a single 2kg takeaway meal.

Uber tries to "solve" the problem by giving drivers two orders at the same
time, but their implementation is terrible:

1\. Sometimes the restaurant doesn't have both orders ready at the same time,
so one of the orders is growing cold and soggy.

2\. Uber's dispatch system has such a strong preference for batching
deliveries together that a driver will often get assigned two orders that are
going in opposite directions from the restaurant!

3\. The high-volume restaurants (like McDonald's) have managed to exempt
themselves from the double-delivery system [for the obvious reason that
customers hate getting cold food!].

------
intopieces
If you care about your local restaurants and have the means to do so, consider
calling in your order and picking it up yourself, with mask and gloves.
Services like GrubHub take a huge portion (like 30%) of the ticket price just
for delivery.

~~~
toomuchtodo
What are the best apps or websites for eatery discovery that are employee
owned, take very small cuts or no cut at all, or both?

~~~
cheungyinglon
[https://www.eatnyc.org/](https://www.eatnyc.org/)

If you live in NYC, this nonprofit helps you find restaurants still open and
order directly. Restaurants keep 100% of commission. I use it to order food
every weekend. Local restaurants seem to really appreciate it.

~~~
toomuchtodo
This is exactly what I was looking for as a template for other locales. Thank
you.

~~~
cheungyinglon
You should reach out to them at hi@eatnyc.org! They're super responsive. I
emailed them to request filtering by cuisine and they pushed it live the same
day.

------
formercoder
Markets are so wonked that both companies would shoot up on this. No way this
creates that much value.

~~~
jannotti
If food delivery and ride hailing continue to experience inverse demand
relationships, there's a pretty big synergy here in being able to keep your
drivers (oops, I mean the independent business owners you've contracted with)
busy.

------
matchamochi
It's just a market share play. None of the unit economics on these businesses
make sense yet.

~~~
s1artibartfast
I'm not sure how you can say that when Grubhub has been operating since 2004,
public since 2014, and turned a solid profit up until 2019.

------
dang
We changed the URL from
[https://www.bloomberg.com/news/articles/2020-05-12/uber-
appr...](https://www.bloomberg.com/news/articles/2020-05-12/uber-approaches-
grubhub-with-takeover-offer) to one that has a bit more info.

------
nimbius
Not to sound like a party pooper but is it staring to seem like Ubers recent
strategy is akin to chasing cars?

\- in 2019 Uber threw itself into bike share after cities had success with it.

\- Uber scooters followed immediately after Bird scooters

\- Uber self driving showed up almost instantly after Waymo.

\- Uber eats showed up almost immediately after GrubHub.

Is there anything meaningfully unique this company does anymore?? I mean the
self driving truck company they bought basically imploded. its got 22
individual criticisms on Wikipedia everything from murder and sexual assault
to tax dodging.

~~~
callalex
There is a lot of money to be made in making "your idea, but more polished and
well integrated into an existing ecosystem". Just look at Apple as the prime
example.

------
eterm
Does GrubHub have much of a presence outside of the US?

As someone from the UK I've never heard of them (Deliveroo is everywhere here
along with Uber Eats).

~~~
kube-system
Not sure, but here in the US, GrubHub has been popular for a long time. I
remember ordering from their website before ride-sharing apps even existed.
Back then, GrubHub was just an online ordering service, they didn't do the
delivery.

------
greatgib
Now you know the truth of why they fired a lot of people. Not because of the
covid but to free cash for the acquisition!

~~~
paxys
Quite the opposite actually - layoffs are a very expensive one-time cost for a
company.

------
tareqak
Since Uber has publicly stated that they will lay off 20% of their employees
rather soon, how does this new decision to acquire GrubHub square with that
[0]?

[0]
[https://news.ycombinator.com/item?id=23011146](https://news.ycombinator.com/item?id=23011146)

------
Supermancho
Amazon adding a delivery service to their Amazon Fresh + Wholefoods would
crush all of the food delivery apps. Not sure why they are still trying with
random restaurants, which will never give you a stable profit line.

------
tren-hard
More surprised the headline is Uber and not Lyft. What is Lyft doing to make
headspace into food delivery?

~~~
ceejayoz
Lyft is probably too late to the game.

~~~
kube-system
They can call their competing service: Lyftovers

------
frellus
After laying off 14% of their workforce they're going with an acquisition?
This makes zero sense.

Healthy companies do not have a large restructuring and then try to burn
capital on an acquisition for revenue. Restructuring to _be_ acquired is a
different story.

------
christopherwxyz
Why spend $4.5 billion to buy a company instead of spending $4.5 billion on
your own to be competitive?

The only answer is that Uber is attempting to monopolize the food delivery
market.

~~~
bpicolo
Selling to restaurants to convince them to onboard to your platform is a slow,
expensive process that's neither easy nor guaranteed. GrubHub has acquired
many other companies (e.g. Eat24) in the past purely for the
relationships/business.

~~~
dehrmann
This. While Uber might also want to be a monopoly in this space, growing
market share is a lot harder than buying it.

------
mcnichol
"More info available on the Bloomberg Terminal"

Did I get tricked into a Paywall Ad?

I have been debating for a long time of creating a Hacker News feed that
filters out specific domains. Bloomberg is on that list without a doubt.

------
elliekelly
Offering to buy a $4.5 _billion_ dollar company twelve hours after you’ve laid
off thousands of people is kind of a dick move.

~~~
asdkhadsj
I hate this. The implication that companies should have _any_ moral behavior
here just enables immoral behavior.

There is no dick move here. The only reason you call it that is because we
have a society _(America)_ built to give almost no support system to workers
if they lose their jobs. The company isn't in the wrong for failing to pay
users. Our societal structure is. Our lack of social safety nets, and
communally focused behavior is.

We set up a system prone to Americans getting screwed, and then are annoyed
when companies screw them? This is our mess. We need to fix it, and not try to
pretend companies should be moral. Doing so will only allow them to be immoral
and hurt workers.

~~~
jorblumesea
Large companies have outsized impact on influence public policy, using bribery
aka lobbying. Collectively, billions are spent yearly to influence lawmakers.

The idea that large companies "just exist" in this system and abide by its
rules strikes me as naive. In many cases, companies are making the policies
themselves through lobbying efforts. They also influence governing agencies
that are supposed to police them. It's called regulatory capture and it's a
well established phenomenon.

[https://en.wikipedia.org/wiki/Regulatory_capture](https://en.wikipedia.org/wiki/Regulatory_capture)

So back to this:

> We set up a system prone to Americans getting screwed, and then are annoyed
> when companies screw them

When the companies are the ones advocating for policies that screw workers and
stop lawmakers from creating proper protections, yes, annoyance is a mild way
of putting it.

~~~
asdkhadsj
I agree with you, but that's sort of a side topic to my main complaint. The
objection I had was applying moral standards to a company.

> Large companies have outsized impact on influence public policy, using
> bribery aka lobbying. Collectively, billions are spent yearly to influence
> lawmakers.

Agreed entirely. But the objection wasn't about the root cause for the society
system we have. My complaint was about using a moral argument as to why a
company should spend their money to provide a social safety net for its
workers.

Trusting companies to do the right thing is, at the root, why we are where we
are. Companies lobbied for freedoms and the public agreed with it, in the
sense that we largely ignored it. We can't be angry at companies for not
acting moral. They're working within the freedoms that we allowed them.

But again, I'm not arguing the root cause or anything. Just merely saying that
if our only tool in this "fight" is a moral finger wagging, oh boy oh boy will
we be in for a quick loss.

~~~
jorblumesea
> Companies lobbied for freedoms and the public agreed with it...They're
> working within the freedoms that we allowed them.

This is the part of the argument I'm contesting. I'm not convinced that the
public went along with it because companies put forth a well reasoned
argument. It's not that we agreed to it, more so that they rigged the system
in their favor, _despite_ the opinions of the people.

I think if you poll most Americans, they wouldn't agree that Wal Mart can pay
minimum wage and also have employees on food stamps. Or that CEOs should get
paid x50 the average worker salary. Or that Amazon should be able to fire
employees for trying to unionize. Or that coal mines can dump toxic waste in
rivers.

There's actually a huge list of things companies do that are against what many
Americans believe, and yet they still get their way. That's my point. The
power balance is truly in the favor of the corporate elite. I'm really not
sure how much we're letting them do anything, and how much they're just
rigging the system the way they want it.

~~~
asdkhadsj
> I think if you poll most Americans,

Well that's my contention, that the opinion of Americans only matters as far
as they're willing to act.

Americans are pushovers, and if they're not willing to do anything other than
share their opinions, what good are their opinions?

It would be like if a Union refused to strike, how much "power" would they
actually have? The power of a Union is in the coordinated action of the
people, not of the coordinated opinion. Likewise, if Americans refuse to act
on this, why would they be listened to?

------
vikramkr
> "More information is available on the bloomberg terminal"

And I thought "Sign up for blah news Premium(tm) for 9.99/day or whatever to
access the rest of this article" was bad. At least those subscriptions aren't
20k/person/year licenses for financial services/trading software ...

~~~
ska
On the other hand everyone I know who has one (a bloomberg terminal) would
readily pay more for it. Can't say that about most news subscriptions.

~~~
vikramkr
That's true. Bloomberg terminals are pretty awesome. The customer base for
them are probably the customer base the most able to quantify how much value
any software provides to their business, and could afford a far higher price
as well. Though I imagine Thomson Reuters and other competitors might be
getting in the way of bloomberg capturing more value than they already are.

~~~
ska
I suspect the latter is true, in a way it wasn't years ago and they were just
ridiculously ahead.

On the cost, one person I know who uses them commented that on any given year
they wouldn't have much trouble picking one day where it paid for itself (i.e.
that day made the whole year subscription worthwhile).

------
cachestash
I thought that said github at first.

------
nojito
Random acquisitions is a telltale sign of a company on its last legs.

~~~
smallgovt
How is this random? Uber has been making significant investments in the food
delivery space via their Uber Eats offering. Consolidation makes sense given
industry-wide razor thin margins and intense competition.

