Grubhub – Market Share Dynamics & Potential Consolidation

And with a quarter of the world’s population now living under some form of lockdown because of COVID-19¹ https://www.bbc.co.uk/news/live/world-52026908 , there is bound to be “an uptick in orders”, an industry expert told Third Bridge Forum in an Interview on Grubhub Holdings Inc.

The Interview covered the food delivery operating environment, focusing on the impact of COVID-19 and other demand trends. The expert, a former director at Grubhub, anticipates an overall increase in sales because of the crisis but noted that the corporate side of the business will be impacted. As the situation intensifies, “I don’t see why that would change,” he said.

Other points discussed in the Interview included the market share dynamics between Grubhub, Doordash and UberEats, commission pressure in key markets, assessing unit economics, and opportunities for global expansion.  

At present, New York and Chicago are “probably the two main areas for Grubhub”. Scaling elsewhere in the US has been more problematic — even in areas like California — typically because of the bigger distance between where people order food from and where restaurants are located. The specialist shared his views on where the “low-hanging fruit” is for Grubhub, citing London and other densely populated cities in Europe. 

The Interview also highlighted the unique trends affecting each of the three main cornerstones of the food delivery space: customers, restaurants and drivers. 

“I would say that, overarchingly, something that people tend to forget when they’re analysing these types of companies is that the business model only really works in areas that are basically densely populated, with all three parts of that marketplace,” the specialist said. He also offered an “easy proxy” for identifying profitable market opportunities.

To access all the human insights from Third Bridge Forum’s Grubhub – Market Share Dynamics & Potential Consolidation Interview, click here to view the full transcript.