Grubhub: from 7.3 billion to 650 million in four years…

Tremendous destruction of value, equivalent to burning 6.65 billion dollars on a pyre: one of the European giants of food delivery, Just Eatsells the North American Grubhubwhich had acquired in June 2020 for 7.3 billion dollars to carry out its expansion in the United States, and He does it for 650 million dollarsa difference in value at the very least overwhelming.

The company has been acquired by Wonder, Marc Lore's last adventurea distribution entrepreneur with many shots fired – Diapers.comsold to Amazon in 2010; o Jet.comsold to Walmart in 2016among others – and has caused a sharp rise in its shares.

What leads to a drop in value like the one experienced by Grubhub? First of all, everything seems to indicate that the company's management was not particularly good: during the pandemic, which led to a huge increase in the use of food delivery services, It was the only company that failed to grow.

Secondly, the question of fee capsAt the height of the pandemic, numerous North American cities, from New York to Las Vegas, cracked down on the fees that food delivery companies charged restaurants. Uber Eats, DoorDash and Grubhub charged up to 30% per order, which, in a context in which restaurants could practically do nothing else because the alternative was to close, led to strong complaints and, eventually, some states such as Massachusetts, New Jersey, Oregon or Washington, and more than seventy counties, cities and local communities chose to put a limit of between 5% and 15% on these rates.

Although several food delivery companies have reported those fee capsand they have managed to reverse them in some cases, Grubhub claims that the measure costs it around one hundred million per year, something that severely penalizes its chances of achieving profitability.

On the other hand, the acquisition of Grubhub in 2020, at the beginning of the pandemic, was affected by a strong battle between Uber y the one that ended up getting her, Just Eatwhich as a result of the process clearly ended up paying a premium much higher than what the company was worth.

A strong blow to Just Eat's aspirations to enter the North American market, and a demonstration that things, in industries such as food delivery, are not at all simple: restaurants complaining about appearing on listings unsolicited offers, appalling working conditions that would make any 15th century slave trader pale, and problems establishing a presence in often hyper-competitive markets that exert a strong pressure on prices. In the end, given certain market conditions, companies are left as much in the rain as their delivery people on many occasions.

The strong popularity of food delivery at home invited many companies to try to conquer that market and try to change our habits so that we practically stopped cooking at home, but everything indicates that things are not going well. to be so simple. And frankly, I'm very glad that's the case.

This article is also available in English on my Medium page,آ آ«Can Just Eat weather the food delivery storm?come on