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New Hampshire restaurants push for tighter regulations on Grubhub, Doordash

Monitor staff
Published: 2/16/2021 4:27:28 PM

Café la Reine didn’t ask for the delivery drivers, but they came by nonetheless.

One by one, workers for Grubhub, a popular mobile app that allows for food delivery orders, showed up at the Manchester restaurant with orders to pick up.

The problem: The café had not entered into an agreement with the app to be listed or partnered. The orders that Grubhub drivers were there to collect had never been communicated to the restaurant itself and assembled in the kitchen.

The result was a mess, owner Alex Horton said Tuesday.

“To work with the delivery services you actually need a tablet from them, or a sign in online... So we have no way of seeing and capturing those orders,” she said.

“So someone might place an order online; it goes through Grubhub. Grubhub shows up; we don’t have the food ready, obviously, because we can’t see the order. We have no indication that an order has been placed. And then we can’t refund the customer. Grubhub refuses to refund the customer. And essentially, it’s like, what do you do in that situation as a small business?”

That kind of scenario tends to only lead in one direction: a bad review from the customer, unaware of what’s holding up their order. Bad reviews can seriously harm the restaurant, likely already ailing from COVID restrictions on dining that have devastated the industry.

Horton, whose café has partnered with Doordash, a competing food delivery app, tried to be upfront with customers about Grubhub. But even after the first incident, the app tried again to list her restaurant and accept orders, she says.

“Grubhub listed us without our permission again” read a Facebook post from the cafe on Jan. 14. “The ONLY way to order delivery from us is through the link listed on our page, Instagram, on Google, and on our website.”

In a statement Tuesday, a spokeswoman for Grubhub confirmed that the company had added Café la Reine to the app itself, but said that the restaurant has now been removed.

“Grubhub places restaurants on our platform to offer diners variety and to increase the volume of orders for the restaurants,” spokeswoman Jenna DeMarco said. “Restaurant owners can request removal by reaching out to us at restaurants@grubhub.com, and Café la Reine is no longer on our platform.” 

Horton's story is a predicament common to many New Hampshire restaurants, according to testimony during a legislative hearing Tuesday. With droves of customers staying away from indoor dining during the pandemic, food delivery has been integral to the business model. But many of the most popular apps allowing delivery have set up arrangements restaurant owners say are unfair, and sometimes non-consensual.

“These national, international companies are coming into our little state of New Hampshire, robbing these mom and pop locations of their profit,” said Tom Boucher, the CEO of Great New Hampshire Restaurants, a company that owns Copper Door, T-BONES and CJ’s Great West Grill and other restaurants across the state.

Now, a bill working its way through the Legislature is seeking to alleviate those tensions.

House Bill 593 would require Grubhub, Uber Eats, DoorDash and other delivery services to enter into an agreement before listing a specific restaurant on their apps.

The bill was important to “stand up for small business owners across New Hampshire, who are being taken advantage of by out-of-state tech companies funded by venture capitalists and Silicon Valley, who will gladly turn a profit on the back of New Hampshire’s restaurant owners,” said Rep. Matt Wilhelm, the Manchester Democrat sponsoring the bill.

Horton’s case had directly prompted the proposed change, Wilhelm said.

According to Horton and Boucher, the problem has been relentless. Consumers have come to expect seamless delivery from the apps; local restaurants are forced to deal with the consequences, the two said.

But those same apps often attempt to unilaterally represent the restaurants, Boucher and Horton say, taking their logos and listing menu items that are often out of date. Sometimes users are ordering menu items that don’t exist any more. Sometimes the menu items are misspelled or mislabeled.

“I think that they’re big enough that they don’t care,” Horton said. “They’re country wide. It doesn’t matter to them if one small cafe in Manchester, N.H. is having an issue with them.”

Boucher has firsthand experience: Great New Hampshire Restaurants filed two lawsuits against DoorDash and Grubhub in February 2020 – before the pandemic caused delivery requests to skyrocket. The lawsuit, which focused on the companies use of the restaurant logos and brands without permission, resulted in a settlement, Boucher said Tuesday.

Even when the restaurants enter into the arrangements willingly, the process has problems. Fees, taxes and cuts for the delivery companies pile up quickly, driving up the price of a hamburger from $14 as listed on the restaurant’s menu to $29 when it finally shows up, Boucher said.

“If you contract with them, they will charge you a marketing fee, an administrative fee, of course the meals and rentals fee, and the delivery fee,” said Boucher. “And the tip.”

At Tuesday’s hearing, no representatives or lobbyists from the delivery companies showed up to contest the bill. But on the bill’s virtual sign-in sheet, eight people listed themselves as in favor of the bill and six against, House Commerce Chairman John Hunt announced.

Not all restaurants have railed against the delivery apps. Alan St. Pierre, general manager at the Margaritas branch in Concord, said DoorDash had quickly become the dominant sales mechanism for orders. While New Hampshire regulations allow dining in, many of the pre-pandemic regulars are opting against that.

“They’re good – they bring in opportunities that we wouldn’t normally do,” St. Pierre said of the delivery services in an interview with the Monitor Tuesday.

Sometimes the results from the app have not been smooth. The menu is sometimes wrong – chicken fajitas were once listed as “chicken fried steak.” Delays by DoorDash drivers can result in cold food, which has hurt the restaurant in reviews.

And with the additional fees and service charges, the restaurant is not making nearly as much profit on each meal that it could be. “There’s less left on the bone by using them,” St. Pierre said.

Margaritas, a chain with headquarters in Portsmouth, has launched its own delivery service t  o combat some of those fees even as it remains partnered with DoorDash.

Still, he sai d, the overall net effect of the deliveries has been a life saver, he said.

“We used to do a couple hundred dollars in takeout on a Friday night,” he said. “Now we’re doing one to two thousand dollars, like a third of our sales.”

The House Commerce committee will hold an executive session on HB 593 to recommend whether it should be passed in the coming weeks.

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