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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

Schumer calls for IG probe into alleged plan by Trump, DOJ lawyer to oust acting AG

Jeffrey Clark speaks next to Deputy US Attorney General Jeffrey Rosen at a news conference in October. Photo: Yuri Gripas/AFP via Getty Images.

Senate Majority Leader Chuck Schumer (D-N.Y.) on Saturday called for the Justice Department inspector general to investigate an alleged plan by former President Trump and a DOJ lawyer to remove the acting attorney general and replace him with someone more willing to investigate unfounded claims of election fraud.

Driving the news: The New York Times first reported Friday that the lawyer, Jeffrey Clark, allegedly devised "ways to cast doubt on the election results and to bolster Mr. Trump’s continuing legal battles and the pressure on Georgia politicians. Because Mr. [Jeffrey] Rosen had refused the president’s entreaties to carry out those plans, Mr. Trump was about to decide whether to fire Mr. Rosen and replace him with Mr. Clark."

3 hours ago - World

Brazil begins distributing AstraZeneca coronavirus vaccine

Containers carrying doses of the Oxford/AstraZeneca vaccine arrive in Brazil. Photo: Maurio Pimentel/AFP via Getty Images

Brazil on Saturday began distributing the 2 million doses of the AstraZeneca coronavirus vaccine that arrived from India Friday, Reuters reports.

Why it matters: Brazil has the third highest COVID-19 case-count in the world, according to Johns Hopkins University data. The 2 million doses "only scratch the surface of the shortfall," Brazilian public health experts told the AP.

Sullivan speaks with Israel's national security adviser for the first time

Israeli national security adviser Meir Ben Shabbat U.S. Photo: Mazen Mahdi/Getty Images. U.S. national security adviser Jake Sullivan. Photo: Chandan Khanna/Getty Images

U.S. national security adviser Jake Sullivan spoke on the phone Saturday with his Israeli counterpart Meir Ben Shabbat, Israeli officials tell Axios.

Why it matters: This is the first contact between the Biden White House and Israeli prime minister's office. During the transition, the Biden team refrained from speaking to foreign governments.

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