Grubhub is temporarily suspending collection of up to $100 million in commission payments from impacted independent restaurants nationwide.
The initiative will provide immediate and substantial cash flow relief to qualified independent restaurants, which make up the majority of Grubhub’s 350,000 restaurant community and drive more than 80% of the company’s orders.
“Independent restaurants are the lifeblood of our cities and feed our communities” said Grubhub founder and CEO Matt Maloney. “They have been amazing long-term partners for us, and we wanted to help them in their time of need. Our business is their business, so this was an easy decision for us to make.”
Grubhub-owned Seamless will also defer commission fees for independent restaurants struggling to stay in business, reported Business Insider (March 16).
The move came in response to declining restaurant sales as more people are opting for takeout over going into restaurants. “With dine-in down as much as 75%, local restaurants need our support more than ever,” a statement from Seamless reads. “As their partner, it is Seamless’ responsibility to step up during this difficult time.”
By deferring its fees, Seamless said it will better allow vulnerable businesses to continue to pay their employees and sustain cash flow. Additionally, it will match all promotions run by independent restaurants with its Smart Promotions feature to “help make their investments in growth twice as effective.”
Grubhub also created a fund to enable proceeds from its Donate the Change program to go toward charitable organizations that support restaurants and drivers impacted by the COVID-19 health crisis. The program will allow diners to round up the change from every order and donate it to the Grubhub Community Relief Fund, with donations from Grubhub+ (and Seamless+) members matched by the company. Grubhub has been raising more than $1 million per month through Donate the Change.
Meanwhile, the Federal Reserve dropped its benchmark interest rate to zero and launched a new round of quantitative easing, reported CNBC (March 15). The new fed funds rate will now be targeted at 0% to 0.25%, down from a previous target range of 1% to 1.25%.
The Federal Reserve also slashed the rate of emergency lending at the discount window for banks by 125 basis points to 0.25%, and lengthened the term of loans to 90 days. Despite the move, the market’s initial response was negative. Dow futures pointed to a decline of some 1,000 points at the Wall Street open.
Already passed by the House, the Senate has not yet scheduled a vote for the coronavirus relief bill, reported CNBC (March 15).