The deal is a consolation prize of sorts for Grubhub. As CNBC explained, Grubhub had courted Uber as a potential buyer until talks fell through. Antitrust concerns were reportedly the sticking point — both companies were worried that the combination of two US-based delivery giants might run afoul of regulators, and they couldn’t agree on how Uber would help Grubhub through any government challenges. On the surface, at least, a Just Eat deal is more likely to go through.

Uber isn’t heartbroken. A spokesperson said that the delivery market will “need consolidation” to meet its potential, but that Uber wasn’t so determined to merge that it would accept “any deal, at any price, with any player.”

Provided the buyout goes forward, it should give Grubhub more of a safety net in the US as it competes with Uber, DoorDash and others. You might not have to worry about losing access to a preferred app or restaurant. It also helps Just Eat’s reentrance in the UK. This might not be great for overall competition, though. While an Uber deal would have had more of an impact on competition in places like the US, the Just Eat merger could still make it harder for upstarts to get a foothold.

The policy comes as restaurants across the US and much of the world struggle to stay in business. In most instances, even depending on deliveries to offset not being able to serve diners in their own spaces, some restaurants have closed permanently.

Unsurprisingly, the companies the policy targets aren’t fans. “We support policy and legislation that help restaurants serve their communities, and a path to reopening those businesses must be the focus,” a Grubhub spokesperson told NBC Chicago. “These arbitrary disclosure rules will do exactly the opposite of their intent by causing confusion to consumers.”

The city, however, sees it as a way to make the entire delivery process more transparent. “By providing customers with more transparency when they use these delivery services, we can further ensure not only fair business practices for our restaurants but also maintain the innovation that is essential to this industry,” said Chicago Mayor Lori Lightfoot.

In their defense, both Grubhub and DoorDash lowered their restaurant fees shortly after the coronavirus pandemic began. In Grubhub’s case, it even went so far as to waive fees for independent businesses. They also already provide a breakdown of the fees you pay as a customer. Of course, having more access to information can never hurt consumers, and it will be interesting to see if other cities adopt similar policies. 

The result is that many of us — restaurants and consumers alike — are now relying on third-party delivery services like GrubHub and Caviar, which are changing their practices to accommodate the new normal.

DoorDash, which also owns Caviar, has implemented no-contact delivery: Delivery people pick up and drop off packages without interacting face to face with either restaurant workers or customers, by, for example, having them grab prepared bags from a designated table, text customers when they arrive and leave food on a doorstep. The company has detailed information on their websites about best practices for merchants and delivery people. Both services are offering two weeks of paid sick leave to delivery people who are ill or who have been quarantined. Significantly, the company is also waiving commissions for 30 days for independent restaurants new to the app and for pickup orders for existing merchants.

UberEats hasn’t gone quite as far, but will compensate delivery people affected by COVID-19 for two weeks. On its site, it lists a variety of ways it’s making Uber and UberEats safer, including having drivers clean their cars regularly and asking those with COVID-19 to self-isolate. As far as food delivery goes, the company has waived the delivery fee for independent restaurants and rather than instituting contactless delivery company-wide, simply offers an option in the app to have the delivery person leave your food at the door.

Seamless and its parent company, GrubHub, have also instituted contactless delivery. GrubHub is offering two weeks’ support pay to drivers affected by COVID-19, and it has also created a Community Relief Fund, funneling all Donate the Change contributions to charities supporting restaurants and drivers affected by the virus. The company also announced it’s deferring $100 million in commission fees for independent restaurants and is “matching all promotions run by independent restaurants” using its Smart Promotions feature.

In uncertain times, should delivery even be an option?

Still, there is a wider concern which goes beyond the powers of a delivery platform: Researchers are unsure of how long COVID-19 lives on surfaces like paper, cardboard and plastic, all of which are used in food delivery. What should us hungry customers stuck at home be thinking about when we order from restaurants? In uncertain times, should delivery even be an option?

The CDC has said that there isn’t any evidence the virus is being spread through packaging or food itself, but Vaughn Tan, a qualitative sociologist at University College London who studies restaurants and uncertainty, thinks we still need to reevaluate our methods. We “need to simply be much more prudential than probably is necessary,” advised Tan, who expects this situation to last for up to 18 more months. Working with scientists like Jennifer Gardy, the Deputy Director of Surveillance, Data and Epidemiology at the Gates Foundation, he’s put together a best practices guide for the food and beverage industry.

For example, if you’re ordering food from a restaurant, go as contactless as possible, from actual payments to tips to having the delivery person leave the food on your doorstep or in your lobby rather than handing it directly to you. Once you’ve received your food, immediately transfer it from the to-go container on to a clean plate or other container, then dispose of the to-go materials straight away, including any bags. Heat the food for a few minutes to further decontaminate it. Be sure to wash your hands for 20 seconds between each step. “Wash hands, open the container, reheat, wash hands again,” advised Tan.

In other words, we should treat outside containers as if they are contaminated. Rick Camac, Dean of Restaurant and Hospitality Management at the Institute of Culinary Education, agrees. He said pickup and delivery using third-party apps are safe “but their approach to carrying packages and engaging customers has to change.”

“Just like a restaurant kitchen, bathroom and/or dining room, extra sanitary precautions need to be taken with delivery. Everything from handling to delivery itself needs to be rethought,” Camac said to Engadget in an email. “For instance, did the Uber Eats driver just drop off a passenger right before picking up your delivery package? In this case, is the car sanitized in between? Is food always held in the trunk? If so, what is being done to control temperature (a truck could be extremely hot or cold)?”

“I don’t believe [third-party delivery services] can guarantee anything.”

This exposes a gap in the gig-economy delivery model: Despite the guidelines of a restaurant or app, it’s hard to guarantee that the delivery itself was hygienic. “I’m not aware of any measures to guarantee the guidelines are followed,” a GrubHub spokesperson said to Engadget in an email, referring to the CDC guidelines, “and am not sure how GrubHub (or any other business) could guarantee that they were.”

Tan agreed: “I don’t believe [third-party delivery services] can guarantee anything.” He thinks restaurants need to take control of the situation as much as they can, redesigning menus to offer simpler dishes that must be reheated, packaged in materials that require customers to transfer the food into microwave or oven-safe containers.

“It seems like the general rule is adapt or die,” said Diana Beshara, the co-owner of NYC’s Cantina Royal, who noted that even if her restaurant delivered to four times as many customers as usually dine in, it still wouldn’t be making the same amount of money as it was before the crisis.

Shawn Cirkiel, the chef and owner of several restaurants in Austin, Texas, said takeout and delivery are “a losing proposition.” “With takeout only,” he said, “you lose opportunities like appetizers, that second glass of wine.” Still, he’s kept the doors open. He’s following all of the guidelines, from taking staff temperatures as they walk in the door to having everyone wear gloves, to propping doors open. (And unlike most restaurateurs, he offers health insurance to his employees).

“You really just [offer delivery and takeout] so that your staff can be positive,” said Cirkiel. “So there’s something to feed people and hopefully there’s a few hours to continue to pay people.” He pointed to a food drive he ran last Sunday, March 22nd, at his restaurant Olive & June. Around 300 service-industry people came to pick up groceries for themselves and their families. “These are people who were in publications like Eater or Time Out Austin,” he said. “People who were culturally important.”

Today, the company announced that it is temporarily suspending its commission fees (up to $100 million) for independent restaurants nationwide. According to CNBC, those restaurants sometimes pay commission fees as high as 30 percent on orders delivered by third-party companies like Grubhub.

It makes sense from a business perspective. Independent restaurants drive more than 80 percent of Grubhub’s orders. If they are forced to close because they lose customers during the coronavirus pandemic, Grubhub will lose restaurants to serve. Some estimates predict dine-in traffic will slow up to 75 percent over the next few weeks. Pickup and delivery orders could help restaurants stay in business and prevent them from laying off staff.

“Independent restaurants are the lifeblood of our cities and feed our communities,” Grubhub Founder and CEO Matt Maloney said in a statement. “They have been amazing long-term partners for us, and we wanted to help them in their time of need. Our business is their business — so this was an easy decision for us to make.”

Grubhub has also created a fund that will allow proceeds from its Donate the Change program to go toward charities supporting restaurants and drivers impacted by the coronavirus outbreak. Diners who round up the change on their orders will be able to donate it to the Grubhub Community Relief Fund. The company will match donations from Grubhub+ and Seamless+ members, and it will work with local city officials to select organizations that can use the funds.

“Banding together during hard times, putting people over profit, and supporting our local businesses is a model we should all follow, and I thank Grubhub for leading the way,” said New York City Mayor Bill de Blasio.

Grubhub and other third-party food delivery services have begun offering no-contact delivery options, and they’re sharing health and safety guidelines with drivers and diners. Other delivery and gig economy businesses, including Instacart, Lyft, Postmates and Uber, are considering ways to compensate drivers affected by the virus.

Even if you use Grubhub frequently, you’ll want to check if your favorite take-out joints are participating in the program; both free delivery and cashback rewards are limited to restaurants that have enrolled in the program. The company told Restaurant Dive approximately 100,000 restaurants across the US are currently taking part in Grubhub+. Another thing to keep in mind is that the minimum to qualify for free delivery is $12.

You can try out Grubhub+ for free through a 14-day trial. If you already subscribe to a competing service, you can check it out without paying for 30 days instead.

For Grubhub, it will be interesting to see if this new service can avoid the type of controversy the company has courted in the past. Last summer, for instance, a Motherboard report found Grubhub had replaced the phone numbers listed on some Yelp restaurant pages so that it could get a referral fee from those businesses. More recently, the company was caught allowing people to make orders from restaurants that hadn’t even signed up for its service. At the very least, those types of practices make it challenging to build out a service like Grubhub+.

The US Bureau of Labor Statistics defines those providing their labor in the gig economy as “independent workers.” Their jobs range from day labor, seasonal workers, substitute teachers, or “Intermediate contractors who are self-employed but connect with clients through an online marketplace or other intermediary, which include drivers hired via peer-to-peer ridesharing apps.” Virtually all independent workers are considered self-employed and typically hired to perform short-term, discrete tasks. This system theoretically empowers workers more flexibility in when and how long they work while employers can better handle seasonal changes in labor demand without having to worry about providing benefits like healthcare.

The rise of the gig economy has also changed the relationship between workers and customers, specifically in the matter of tipping which puts more than $42 billion dollars of income into the pockets of workers in the American food service industry alone. Dr. Michael Lynn, professor of consumer behavior and marketing at the Cornell University School of Hotel Administration, points to five major motivations behind Americans’ traditional tipping practices.

“One is to repay reward servers for the work they do — reciprocity,” he told Engadget. “You’ve done a favor for me, I need to reciprocate. Here’s some money.” Lynn also points out that tipping big can help ensure better future service, especially if the customer expects to return regularly. Customers will also tip as a means of displaying social status by showing off their wealth with big tips, like the patron who ordered two waters and left a $10,000 tip at a North Carolina restaurant in 2018. Another reason is to help the server. “In many cases, people know servers make substandard wages, below the standard minimum wage,” Lynn continued, and will tip as a means of altruism. Finally, many Americans simply see it as a social obligation or duty to tip. Nobody wants to be seen by their peers as that cheapskate who left $0 on a $300 tab.

However, tipping only serves as a moderate motivator to wait staff. In a 2001 study, Lynn found that service quality accounts for less than 2 percent of tip amount variance. “There is in fact a weak relationship,” Lynn explained. “Tips are not strongly related to service.” That’s not to say that the only reason servers show up each shift is for the chance to take home tip money.

“They have to provide a certain level of service just to keep getting fired,” Lynn continued. “And many people will work in providing a good level of service because they take pride in their work. Tips aren’t the only motivations do a good job.”

But they sure help.

In a 2017 study, Lynn notes that the rise of the gig economy is associated with a decline in tipping norms, especially among the younger adults who constitute the largest user base of gig economy services. A subsequent 2018 NYT post found that while traditional cabbies enjoy customary tips in excess of 20 percent of the base fare, Uber drivers generally only get around 5 percent of their base fares. To be fair, Uber introduced its ride-hailing service in 2009 and spent the next eight years telling passengers not to tip their drivers, right up until the company introduced its tipping feature in 2017. So it’s not as though Uber customers have been socially primed to tip their drivers like they would a taxi, even though they were always free to give their driver a cash tip if they chose to.

In a study from the NBER, published earlier this month, a team of researchers from Stanford, UCSD and University of Chicago found some surprising contributing factors as to why that ride-hailing tip disparity exists. The study examined 40 million Uber trips conducted from August 18, 2017 through September 14, 2017. They found that only 16 percent of those trips ended with the driver getting a tip, and when they did, the average amount was $3.11 (around 26 percent of the fare).

Tips were typically highest (in both amount and frequency, $3.70 and 17 percent respectively), in the hours between 3 am and 5 am. That’s usually when business travellers are getting off red eye flights or getting to the airport to catch the day’s first plane out, and potentially expensing the ride to their company. Conversely, the study found that tips were lowest around midnight, earning drivers less than $3 on just 13 percent of their trips.

In addition to a driver’s ability — hard acceleration, breaking, and speeding were all found to be surefire ways to lose a potential tip. Their age, gender and ethnicity all played a role in how and how much extra they received. It should come as no surprise that younger female drivers are tipped at higher rates and amounts than their male colleagues, though that gap does close as the drivers’ ages increase. Yes, it’s for the same reason that Hollywood actresses stop getting cast after a certain age and how busty blonde waitresses consistently earn bigger tips than their less comely co-workers.

Interestingly, female passengers tip in both smaller amounts and a lower rates than male riders unless their trip is with a female driver. The study authors point out that “men tip female drivers nearly 12 percent more than they tip male drivers, while females tip female drivers roughly 11 percent more than they tip male drivers.”

“Our results indicate that gender matters when it comes to tipping,” the study authors concluded. “Gender also interacts with age, with men tipping younger women more than they tip any other group. We also show that tipping varies based on the demographic characteristics of where the rider and driver are from. As expected, we find that the quality of the ride matters as well, with higher quality generating higher tips.”

It’s not just Uber, the gig economy has also had an unexpected impact in the tipping norms of delivery drivers as well. A study out of MIT and Michigan State University this past May argues that because gig workers can work when they want and are paid per task, “market norms crowd out the internalized social tipping norms that compel some consumers to tip out of a sense of obligation or duty.” Additionally, knowing that gig workers don’t have to take a job if they don’t want to can depress a user’s willingness to tip.

Their study involved a pair of smaller studies; one using Foodler, which utilizes a restaurant’s own employees as delivery drivers; the other using GrubHub, which relies on third-party drivers.

For the Foodler test, the researchers ordered 115 times to the same Boston-area address over the course of five years, alternating between tipping up front and withholding tip until the food actually arrived. They found that, when withholding the tip, their orders arrived around seven minutes faster on average compared to tipping up front (38.77 minutes and 45.67 minutes, respectively). “We also found that when tips were provided upfront, drivers tended to deliver food faster when the tips were larger,” the study authors wrote, “despite seemingly not having any additional incentive to do so besides feelings of goodwill or reciprocity.”

“It suggests that tipping norms decline in the gig economy not because services are ordered online or over a smartphone app,” the authors concluded, “but because the workers have control over whether they work at that time.”

Conversely, GrubHub drivers are independent workers, not employees of the restaurant you ordered from. The researchers hypothesized that because GrubHub drivers only see a composite price on the delivery as a whole (that is, they don’t see how much tip is included, just the total), they “would be less likely to even notice tips in the first place, and the size of upfront tips would have little impact driver performance.”

Testing this involved 12 volunteers ordering 154 meals through the online service. The average delivery time across all orders was just under 40 minutes. Even when controlling for cuisine variety, order subtotal and distance from the restaurant, only distance showed a significant effect on delivery speed, adding 6 minutes per mile on average. “A simple regression of average time on tip percentage up front also found no effect,” the study authors wrote, “suggesting not only that the timing of tips did not matter, but also their size.”

It appears that hiding the tip amount from GrubHub drivers (who rarely receive tips once they arrive), motivates them to complete deliveries faster so as to complete more deliveries per shift. Restaurant delivery drivers have the opposite motivation (get more and bigger tips) and therefore prioritize some deliveries over others depending on who’s doing the ordering.

One way in which restaurant and GrubHub drivers are alike is in how their tips can impact their paychecks. In a number of states, restaurants can legally pay tipped workers less than the state and federal minimum wage because they make tips. It’s called the tip credit.

“Essentially, employers are allowed to credit some of the tips servers make toward their wages and pay them more wages as a result,” Lynn explained. The restaurant is still paying those workers a flat hourly wage, “it’s just lower than what the cooks are making.”

A number of gig economy companies, including Instacart and DoorDash, have until recently done the same. They’ll count the driver’s base pay and tips together to subsidize their own cost liability. So if the minimum hourly wage in a state is $15 but the driver’s base pay and tips only come out to $12, the company will cover the $3 shortfall. If however the driver’s base and tips for that hour exceed $15, the company only has to pay the base.

Lynn sees nothing wrong with this, so long as all parties are up front about the arrangement. “The idea that tips would supplement or replace wages, at least conceptually, that happens in restaurants all the time,” he said.

In DoorDash’s case, “the only real problem with it is that many consumers weren’t aware of the policy,” Lynn continued. Customers thought that they were helping their driver with their tips unaware that every extra dollar given reduced the wages the driver received. “And so, DoorDash was keeping money that customers thought they were giving to the server that was augmenting the servers income.” Unsurprisingly, public reaction to this revelation was fierce and negative, prompting the company’s CEO, Tony Xu to tweet:

1/ After a year of research and conversations with thousands of Dashers, we built a pay model to prioritize transparency, consistency of earnings, and to ensure all customers get their food as fast as possible.

— Tony Xu (@t_xu) July 24, 2019

“There’s nothing wrong with that if everybody knows that up front. The employees knew it up front, they signed a contract, but the customer, in many cases, didn’t know that. And so, arguably DoorDash could have, should have, done more to communicate their compensation policy to consumers. As long as everybody knows about it, what’s the harm?”

Images: Getty Images (Uber); graph (NBER)

“We have seen a lot of opportunities to strengthen both these ecosystems but those opportunities require more focus and more investment,” said Dorsey during the earnings call. “To increase our focus, we decided to sell our Caviar business to DoorDash.”

Caviar, which first launched in San Francisco in 2013, aimed to offer a more premium experience than other food delivery platforms at the time, such as Grubhub and Seamless. Instead of typical delivery fare such as fast food, pizza or Chinese, Caviar targeted upscale restaurants that didn’t normally offer delivery. It was one of the first food-delivery platforms to employ its own “food messengers” rather than rely on delivery drivers employed by the restaurant.

DoorDash is hardly the first food-delivery platform to buy up one of its rivals. Grubhub, which merged with Seamless in 2013, has since acquired Eat24, AllMenus, MenuPages, LevelUp and Tapingo, the campus food delivery platform. Both Grubhub and UberEats were once the biggest players in the food delivery game, but DoorDash may soon top them. Explosive growth this year has lead to it outperforming its competitors in consumer spending and coverage area.

Moreover, GrubHub appears to run “shadow” pages on some of these domains without the permission of the restaurants themselves. While both the real and shadow pages ultimately result in orders, GrubHub’s unsurprisingly points foodies solely to its own services. That could deprive restaurants of revenue by steering would-be customers away from the actual sites, where the companies don’t have to share some of their money with GrubHub.

We’ve asked GrubHub for comment. However, some restaurant owners are already irked by the practices. This might prevent restaurateurs from using the most obvious web address, reducing the chances that customers will find their online presences. Shadow pages could even outrank the real pages in search results and make it harder to see menus and ordering options beyond what GrubHub offers. In other words, your favorite Thai place or pizza joint might have trouble retaining their independence.