Yesterday Food & Dining Magazine concluded an exclusive three-part series written by Michael L. Jones: “We are being conned — the TRUTH about Delivery Apps.”
Food delivery services were a lifeline for local restaurants after Covid-19 forced them to close their dining rooms, but in the end these services may be worse for business than the disease. Food & Dining Magazine’s Michael L. Jones examines how the pandemic has changed the power dynamics between restaurant owners and the companies who own the food delivery platforms.
Here are the links.
Then the news came Thursday that battalions of lawyers had been mobilized for active tort duty following a major acquisition in the delivery segment. As Eater reports, on Wednesday “Just Eat Takeaway beat out Uber, (to buy) Grubhub for $7.3 billion.”
In an all-stock deal, Dutch food delivery company Just Eat Takeaway has bought Grubhub, giving the brand its first presence in North America … previously, Uber had been in talks to buy Grubhub, which would have created the country’s largest food delivery company at a time when delivery has never been more popular.
Delivery has also never been more scrutinized, as local governments continue to crack down on third-party delivery fees, and require delivery services like Grubhub be more transparent about their fee structure …
The ramifications of the deal didn’t take long to alight in Louisville, which is the corporate headquarters of Yum Brands.
Yum Brands sues Grubhub, claims breach of contract, by Haley Cawthon at Louisville Business First
Yum Brands Inc. has filed a lawsuit against Grubhub, claiming the delivery giant breached the terms a five-year contract.
The lawsuit, filed Thursday in New York Supreme Court, alleges that Chicago-based Grubhub (NYSE: GRUB) violated the terms of its delivery agreement with Louisville-based Yum Brands (NYSE: YUM) by implementing a new pricing structure for restaurants on Monday, June 8.
Seems the parties to the lawsuit have been, shall we say, feuding. The legalese is thick, but the reporter Cawthon adds this helpful conclusion:
According to the lawsuit, the contract protected Yum by providing for a $50 million termination fee should Grubhub, an independent public company, come to be controlled by a third-party owning or operating a business that competes with Yum’s business, which may be applicable given the news of Just Eat Takeway.com’s acquisition.
Eater gets the final word.
“And while no deal with Uber means less consolidation of the American delivery platform market, none of these transactions are likely to fix the problems of exploitation in delivery and the gig economy.”