Once Worth $7.3 Billion, Grubhub Sells For Just $650 Million (cnn.com)
- Reference: 0175478775
- News link: https://slashdot.org/story/24/11/15/2211219/once-worth-73-billion-grubhub-sells-for-just-650-million
- Source link: https://www.cnn.com/2024/11/13/investing/grubhub-sale-wonder/index.html
> Europe's biggest meal delivery firm, Just Eat Takeaway, said on Wednesday it had struck a deal to [1]sell its U.S. unit Grubhub to Wonder for $650 million , sending its shares soaring 20% in early trading. The Amsterdam-listed company had been looking to offload Chicago-based Grubhub since as early as 2022, after acquiring it in 2020 in a $7.3 billion deal amid a pandemic-driven boom in delivery services -- a process that was hampered by slowing growth, high taxes and a question of fee caps in New York City.
>
> "Just Eat Takeaway is at last putting an end to its disastrous U.S. journey," Bryan Garnier analyst Clement Genelot said, noting the group had destroyed more than $7 billion in shareholder value there. Grubhub's enterprise value of $650 million includes $500 million of senior notes and $150 million cash, Wonder said in a statement. Wonder is a food-delivery startup led by former Walmart executive Marc Lore.
[1] https://www.cnn.com/2024/11/13/investing/grubhub-sale-wonder/index.html
I'm surprised it sold for anything. (Score:4, Insightful)
I only used it during the pandemic after doordash premium freebies ran out and amazon offered a free year sub. The fees and prices were effectively the highest and they NEVER offered promotions. Meanwhile ubereats is over here spamming me every other day about 60% off orders which comes out to something like 10% less than what I would normally pay if I went and picked up the takeout myself. Even doordash offers some small promotions that mostly just eliminate all the middlemen fees for an order or two rarely.
The fees on these services are enormous and we're just talking the tech part of it - they're taking 30% from the vendor, they're charging us another 5-30%+, and then they are paying a delivery driver sub-minimum wage with the expectation that we will tip (mandatory bribe) the couriers to deliver the stuff because nobody takes an order that doesn't have a tip applied. I honestly have no idea how they think they are providing value by being leech-like middlemen to the whole process. The whole thing feels like something that could be open sourced and run by a nonprofit in terms of infrastructure, and then it would be up to stores to handle the customer service, payment and driver cost.
As a bonus, GrubHub forces you to tip before delivery, when you're placing an order. Unlike ubereats you cannot adjust the tip based on service without contacting support and having them adjust it. It's not a tip at all, but a bribe that says "please actually take my delivery order."
The bottom line to me is delivery fees on top of the inflated prices way above and beyond in-store or first party delivery, the enormous tip, the vendor fees and the frequency of mistakes or extremely long delivery times make this kind of service not worth it as a customer. If the fees were flat it would at least make some sense to do relatively large orders rarely. That's not even the case though, you're just charged way more for the same effort from all parties except for the restaurant.
Re: (Score:2)
I'm not a fan of any of these services but, from a consumer point of view, Grubhub is about the same as DoorDash. They run useful promotions about the same frequency, which is a lot better than Uber Eats. Uber Eats advertises huge promotional discounts but they only apply to delivery orders and then only to SOME restaurants which they make painful to find.
For places I order from often, I make an effort to use the restaurant's preferred service. These are never Grubhub, DoorDash, or Ubereats but some more
Worth (Score:1)
The word "worth" is an interesting term here...
Wonder isn't a delivery service (Score:2)
They run single-kitchen food halls which is an interesting idea. I'm not sure it's a real improvement over the multi-kitchen food halls that have become pretty trendy. But given that food halls are a growing market, Wonder is an interesting company.
Never (Score:4)
Grubhub was never worth 7 billion. Some dipshit beyond insanity PAID that at one point...but thats because he was once-in-a-lifetime stupid. Equally with the once-in-a-lifetime amazing value that such a service existed the moment people couldn't leave their own houses.
/me scratches head (Score:3)
Covid19 was really obviously causing bubbles all over the place.
It looks just like the stock market mania shit. The market rises massively on a bubble (that's really obvious) so a bunch of losers still decide they have to buy high, only to be fleeced almost immediately by an equally rapid fall on the other side of the bubble.
So, why did this happen? They weren't just any old small time investor. Surely they understood they were buying up an extremely overpriced company.
It just looks corrupt from the outside.
Re: (Score:3)
I think they all imagine we would transition to a world where everyone mostly stays home and orders a bunch of stuff and never leave the house. And then they could crank the prices up and make massive gains.
In practice, the delivery is so expensive and so unreliable that only few people do that and the delivery market crashed!