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Photo: GrubHub

After his company posted mixed quarterly earnings results Tuesday, GrubHub CEO Matt Maloney didn't shy away from accusing competitors of tricking customers with hidden delivery fees in an interview with Axios.

Why it matters: A recent controversy over the driver pay policies of some companies like DoorDash highlighted the exact challenge food delivery companies face: building a sustainable business despite high delivery costs.

  • When customers order via most other services, they find multiple charges ("delivery fee," "service fee," etc.) when they reach the final checkout steps, and these can add up to much more than the advertised delivery charge, he points out. Some services also mark up items to make up for their very low delivery fees.
  • 'The price gouging in our industry...I'm concerned that it will dramatically slow the growth of our industry," he said.

Yes, but: GrubHub also got its share of negative headlines recently over its since-ended practice of charging restaurants for telephone food orders and setting up websites for some restaurants on its marketplace.

  • During a call with analysts, Maloney said that these orders represent "low single digit percentage" of GrubHub's orders, and reiterated that the company always disclosed to restaurants its practices and always transferred website domains if requested.

Addressing why he thinks GrubHub will remain competitive against its rivals, Maloney says that as long as the company can provide restaurants with high volumes of orders, they'll be happy to subsidize some of the delivery costs.

  • This is the key to keeping its fees to consumers low, he adds.
  • GrubHub's latest push is to provide more tools for loyalty programs to restaurants on its marketplace.
  • Currently, about 35% of GrubHub orders are delivered by the company — the rest of deliveries are fulfilled by the restaurants themselves.

On partnering with restaurant reservation company OpenTable, which will now let customers order food from its app: "I think it's just another way to reach diners," says Maloney.

  • GrubHub will split with OpenTable the commission it takes from restaurants.

On potential acquisitions: "We have bought a lot of companies and the consistent rationale has been reasonable valuation," said Maloney.

  • And since his rivals' current valuations are higher than GrubHub's market cap, it's improbable we'll see the company acquire any of them in the foreseeable future, he hints.
  • As for the reverse: "We are a public company so we're for sale every day... but we are a self-sustaining business. We will be around for 50 years," said Maloney.
  • Postmates, which is working on an IPO, is also rumored to be shopping itself around.

Go deeper

Dan Primack, author of Pro Rata
1 hour ago - Economy & Business

FTX CEO predicts more U.S. crypto flight

Photo: "Axios on HBO"

FTX doesn't look much like a company valued at $25 billion. Its new headquarters, located in a sleepy part of The Bahamas, is so nondescript as to not even have a sign. But it does expect to soon have neighbors.

Driving the news: Founder and CEO Sam Bankman-Fried tells "Axios on HBO" to expect "more and more crypto flight from the states" if the U.S. doesn't soon create a regulatory regime for cryptocurrencies.

Developed countries reveal $100 billion climate finance plan ahead of COP26

Alok Sharma, head of the UN Climate Summit in Glasgow, speaks in Paris on Oct. 12. ( Li Yang/China News Service via Getty Images)

After 12 years of fits and starts, industrialized nations on Monday put forward a detailed plan to provide at least $100 billion annually in climate aid to developing countries starting by 2023.

Why it matters: The plan, presented by representatives of Canada and Germany, is aimed at defusing one of the biggest sources of tension at COP26, which is the failure of industrialized nations to follow through on their financial commitments.

2 hours ago - Health

Moderna says COVID vaccine shows strong immune response in kids

Photo: Martin Galindo/Long Visual Press/Universal Images Group via Getty Images

Moderna on Monday released trial results for its coronavirus vaccine for children aged 6 to 11, saying it provides a "robust" immune response after two doses.

Why it matters: Moderna said it will officially submit the results to the Food and Drug Administration for authorization in "the near term," meaning we could soon see two coronavirus vaccines available to protect approximately 28 million more kids in the U.S.

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