Despite people staying at home, the amount of food delivery in New York is lower now than it was before the new coronavirus pandemic hit, Grubhub said on Monday.
The Chicago-based food delivery platform, which also owns Seamless, released an update on its first-quarter earnings, showing how COVID-19 has impacted its business. There have been “record numbers of new diners and new restaurants on the platform,” the company noted in its earnings update — but orders in New York “remain below pre-COVID volumes.” Business in the city, which has become the center of the crisis, has been worse here than in other metro areas across the country, the company said.
That’s in part due to a dramatic drop in corporate business. Companies that previously used the service stopped after instituting work-from-home policies to help mitigate the spread of the new coronavirus.
But home delivery took a hit as well due to the pandemic. Huge swathes of local restaurants have closed, which likely contributed to the decline, Grubhub said. Other factors may include residents leaving town or cooking more at home. Following the Monday report, shares of the company’s stock dropped.
Many restaurants in NYC have opted to temporarily halt all operations, and most of the ones remaining open for delivery and takeout say that it’s still not nearly enough to sustain business. Many are calling for platforms like Grubhub to cap the commission it takes from restaurants — a move that hospitality advocates started calling for long before the crisis started. Last Friday, San Francisco’s mayor took the matter into her own hands, announcing that delivery platforms must cap commissions at 15 percent as restaurants struggle to stay open.
Though the backlash against Grubhub started swelling months ago, the crisis has heightened scrutiny against the company, which continues to charge commission fees as high as 30 percent. Grubhub has dug itself deeper with moves like “Supper for Support,” a promotion intended to help drive business but forced restaurants to shoulder the cost of discounts.