Grubhub founder and CEO Matt Maloney is putting in a lot of long days and nights as his third-party food delivery service handles an influx of new restaurant partners — while also dealing with losses — as people order-in amidst the coronavirus pandemic.
“We are seeing five times to 10 times the leads or signups. Our signups are off the charts. It’s multiples of our previous highest day, week and month. We are blowing by all the records. There are a lot of restaurants coming online,” Maloney said on Yahoo Finance’a The Ticker.
At the same time, Maloney added that he has seen 30% of restaurants close in certain markets during the outbreak. These are likely many mom and pop restaurants that absent strong balance sheets and incoming cash flow, have decided to close per state mandates. These are businesses that also lack the cutting-edge technology to compete in this type of insane environment with national chains such as Papa John’s and Yum! Brands that has established delivery networks and vast industry connections.
It’s unclear if these small businesses will ever reopen, either.
“If they are closing they are probably not reopening,” Maloney acknowledges. Maloney has stepped up to help the independent chains by waiving $100 million in commissions across the country. No doubt that will hit Grubhub’s bottom line, but it’s the right thing to do for a business that thrives on bringing small restaurants into the delivery experience.
“This is an industry that has a lot of businesses with tight margins with some leverage. And so a situation like this is certainly going to stress them. Even healthy businesses are going to be stressed by this,” explained Yum! Brands CEO David Gibbs in an interview with Yahoo Finance.
Added Gibbs, “I’m glad to see that the government is working on a stimulus bill that really provides the kind of relief that will benefit the industry, keep those people employed through the crisis, and allow the restaurants that emerge from on the other side of this to continue operating, and continue to help fuel the economy and keep those jobs, those jobs for our economy.”
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