GrubHub Halts Collecting Commissions From Independent Restaurants As Business Drops Off Due To Coronavirus

CHICAGO (CBS) -- Grubhub will suspend the collection of up to $100 million in commissions it charges to independent restaurants who use its platform for food delivery, in order to help them offset lost business from worries about the coronavirus.

"Independent restaurants are vital to our economy. They literally produce the flavors that we experience in our communities," Grubhub CEO Matt Maloney said Friday morning at City Hall in Chicago.

Illinois Restaurant Association president Sam Toia estimated that the move will mean potentially thousands of dollars in savings for local restaurants that use GrubHub for delivery.

Toia said restaurants have seen a 40% to 70% decline in business since the COVID-19 outbreak, and GrubHub's decision to halt collecting commissions from independent restaurants would help them pay their own bills

"It's going to help the restaurants throughout our 77 communities pay their mortgages, pay their rents, but most importantly … make payroll to make sure that they're paying their team members," Toia said.

Mayor Lori Lightfoot applauded GrubHub for showing "true civic leadership."

"This is a huge deal," she said.

GrubHub also will set up a "disaster relief fund" to help independent restaurants and delivery drivers, by providing money from its Donate the Change program to charities that help the restaurant industry.

"These funds will be directed to charities that can directly impact the local restaurants as well as the local drivers whose lives have been upended with this crisis," Maloney said.

Donate the Change allows GrubHub customers to round up the change from their order and donate it to the Grubhub Community Relief Fund. Maloney said the program raises more than $1 million per month. GrubHub will work with cities across the country to identify charities that can best use the donations to help restaurants and delivery drivers impacted by coronavirus.

Although the city is encouraging people who feel sick to eat at home, officials also are asking people who are feeling healthy to continue dining at restaurants and support the local economy.