how grubhub works?

How Grubhub Works? | Grubhub Business Model

How Grubhub Works? | Grubhub Business Model
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Wondering what’s going to be your today’s grub? Where are you going to get your food ordered from? If this is what you’re thinking then you haven’t tried GrubHub. A skyrocketing startup that caters to online food order and delivery needs deserves the spotlight on this platform.

GrubHub brings you hot and sizzling food in two ways :

Order: order different dishes of different cuisines

from numerous eateries in your locality by typing in your address simply. GrubHub will deliver it to you.

Pick up: It provides you with a detailed search of pickup restaurants near you to get food of your choice from.

GrubHub makes sure that the diners get the best of what they want thus it provides 24×7 assistance to its customers and amazing deals and coupons which other competitors in the line don’t realize the need of.

As an on-demand food delivery platform, GrubHub has partnered with more than 85,000 restaurants in more than 1600 locations across USA and processes over 2,00,000 orders on a daily basis.

Grubhub Business Model

Grubhub has been successfully growing since 2004 and a milestone of becoming an IPO in 2014. It’s upward graphs are a result of its effectively creative business model and a promising revenue generation strategy.

GrubHub works on a 4 step dynamic model which goes in the following way:

  • Search: customers can search through a list of restaurants and select their favourite food from their favourite cuisines. They can avail special deals and offers by skimming through the restaurant community on the platform. The search results can be refined by selecting the location for placing the order.
  • Place order: Once the customers have decided their order they have the option of completing the transaction by making an online payment or as they feel suitable.
  • Process: After receiving the order GrubHub redirects it to the particular restaurant. The restaurant in turn prepares and packs the order for delivery.
  • Delivery: GrubHub delivery personnel completes the final step by picking up the order from respective restaurant and delivering it to the customer.

Grubhub’s success is highly praiseworthy because of their effective tactics of marketing them as a restaurants menu aggregator and their determination of offering their customers amazing experience and making them return to their partner restaurants. Grubhub’s unique options for its customers have helped it take a giant lead in this sector. Some of its salient features are as follows :

  • It has partnered with almost all the restaurants of the cities thus offering it’s customers a wide variety of food items.
  • It provides special discounts to its users for different restaurants depending on their partnership.
  • GrubHub has developed a rating system which places restaurants in an order on the basis of their reviews. The users rate the restaurants on the basis of the quality of the food and their experience.
  • Its technology helps you enhance your experience by telling you the distance of the restaurant from the location, average food price, delivery fee ( if any ), estimated wait time for the order in addition to the presence of a 24×7 customer care team.
  • It presents a Pickup option on its platform which has helped customers buy their favourite food from great restaurants without any hassle.

2 Tiered Customer Strategy Of GrubHub

Every one of us is striving towards achieving a satisfactory lifestyle and food plays a great role in affecting our lifestyle. Good food is something that everyone loves and looks forward to during the course of the day. Thus, customer segments of GrubHub can be classified as follows:


  • People who do not wish to cook for dinner and want to enjoy with their family at a great restaurant find GrubHub a helpful platform.
  • People who are diehard food lovers but do not have the time to go out and like getting their food delivered at their doorstep.
  • For working professionals who find it difficult carrying a lunch box to their cabin often rely on buying food from outside for lunch. For them, GrubHub is the go-to for all their needs.


  • Restaurants looking to expand their business by increasing their reach and customers, doing online branding, find GrubHub a trustworthy partner for their establishments.
  • Food joints which wish to deliver their amazing food to the doorstep for their customers.
  • Restaurants which have a shortage of delivery personnel to fulfil orders at home trust GrubHub for their deliveries.

How Does GrubHub Generate Revenue?

GrubHub being an on-demand food delivery platform works on a simple yet effective less-ownership model and generates revenue for itself by the below-mentioned methods:

Commission On Orders

GrubHub acts as a link between the customer and the restaurant. Helping a user order food from a restaurant of his choice and getting the order delivered to their doorstep for the restaurants and food joints, GrubHub charges a commission percentage for each and every order delivered.

The amount of commission being charged ranges from 5% to 15% of the value of the order depending upon the partnership with the restaurant. On an average, it charges a commission of about 12-13%.

Marketing Plans for Restaurants (Sponsored Listings)

Grubhub is an amazing platform for restaurants to enhance their market presence and expand their customer database. They have marketing and advertising structured plans for the restaurants which lists them on the top of the chart for a limited time which brings more traffic to the restaurant. This benefit depends on the listing’s commitment to a higher commission (~20%). Thus, for the restaurants to stay on the top, they have to pay Grubhub for the ratings.

Grubhub’s Market Presence

Grubhub is one great example of an upwards shooting business model. One aspect of the success of a business model is its customers and their satisfaction. It is important for a business to not only retain its customers but to increase its reaches as well. The main goal for any business is to not just sell their products but to strengthen its relations with its customers. Grubhub has come out as a giant player in this industry because of it’s sheer determination and hard work.

Go On, Tell Us What You Think!

Did we miss something?  Come on! Tell us what you think about our article on How Grubhub Works? in the comments section.

Ayush Singh

Written by

Soccering my life in, travelling my way out, in the middle of that, alive.

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  • Avatar Sourabh sourabh says:

    Unique service for entrepreneur…
    Thanks for giving a different approach for entrepreneurs

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