Grubhub Eliminates Fees on Large Orders in Bid to Win Back Market Share
In a major shift for the competitive U.S. food delivery market, Grubhub announced it will eliminate delivery and service fees for all restaurant orders exceeding $50. The move, set for a limited rollout before a broader February 2nd launch, is a clear attempt to lure customers from dominant rivals DoorDash and Uber Eats.
"Fees have become the single biggest pain point in our industry," Grubhub CEO Howard Migdal stated in an interview. He revealed that across competing apps, the average fee for a $50+ order is about $13, a cost that leads 81% of Grubhub users to abandon their carts at checkout. The company estimates the new policy will save customers "hundreds of millions of dollars per year."
This aggressive pricing strategy signals a focus on long-term customer loyalty over short-term profit, a notable pivot for the company. Since its acquisition by Wonder Group for $650 million early last year, Grubhub has aggressively expanded, adding over 100,000 restaurants and extending its reach to 90% of U.S. consumers. The recent acquisition of the rewards app Claim by parent company Wonder further points to a consolidated strategy of building a more comprehensive dining ecosystem.
User Reactions:
Michael R., frequent user from Chicago: "Finally, a platform that listens. Those last-minute fees were a dealbreaker for family dinners. This might actually make me switch back from DoorDash."
David Chen, industry analyst: "This is a classic customer acquisition play. Grubhub is sacrificing margin to gain volume and data. The real test is whether they can retain these customers once rivals inevitably respond."
Sarah Li, restaurant owner in Austin: "It's a gimmick. They'll just find other ways to make the money back, probably from us restaurants with higher commissions. This race to the bottom on price hurts everyone who actually prepares the food."
James K., college student: "$50 is a high bar for a single order. This feels targeted at families or groups, not your average solo diner. Helpful, but not a game-changer for me."
The initiative underscores the intense pressure in the food delivery sector, where customer retention is low and switching costs are minimal. By directly attacking the industry's fee structure, Grubhub is betting that significant savings will be enough to alter the competitive landscape.