Yelp Is Charging Marketing Fees to Restaurants In New Ordering Option
Some restaurant owners are completely unaware of it.
A new ordering option through Yelp is now charging restaurants up to 20 percent for every order placed through the app.
Instead of linking customers directly to a restaurant’s phone number when a user wants to place an order, Yelp has established two options: “Delivery or Takeout” or “General Questions.” While “General Questions” connects to the restaurant’s actual phone number, the “Delivery or Takeout” option connects users to a number owned by Yelp partner GrubHub. When this number is dialed, Yelp charges restaurants a “referral fee” of between 15 percent and 20 percent of the order total.
However, this option is so new that some food establishments may not even realize the fines exist yet. Mohammad Zaman, an owner of Afghan Kabab and Grill House in Brooklyn, believed the Yelp phone number listed on the website was a mistake at first.
“It’s not fair because this is our customer who called directly into our restaurant,” he said. “It’s a trick.”
CEO of the Manhattan restaurant group 5 Napkin Burger Robert Guarino was also unaware of the second phone number that is connected to his restaurants.
“We’re working with these companies to help generate orders, but so many times, we’re put in a position where we need to compete against them to get access to our customers,” he said. “So many of these practices make it hard to trust the companies. To not have all the practices clearly spoken about and understood by the businesses is really scary in my eyes.”
In addition to the marketing fees for being listed on Yelp and GrubHub pages, restaurants are also charged 10 percent of order totals if a user selects GrubHub for delivery.
“It is important to keep in mind that we are a marketing platform and, in almost all of these cases, the diner would not have discovered or placed an order with this restaurant without our platform,” said Brendan Lewis, a spokesperson for Grubhub in an email to Vice. “The order is the result of our marketing efforts.”
Editor’s Note: RealClearLife, a news and lifestyle publisher, is now a part of InsideHook. Together, we’ll be covering current events, pop culture, sports, travel, health and the world. Subscribe here for our free daily newsletter.
Thanks for reading InsideHook. Sign up for our daily newsletter and be in the know.
Suggested for you