GrubHub took a hit in the fourth quarter as it worked to support restaurants affected by the pandemic
Feb 4, 2021, 05:18 IST
A GrubHub delivery person. Noam Galai/Getty ImagesNoam Galai/Getty Images
GrubHub took a net loss in the fourth quarter, even as daily orders and users rose.
The company said it aided struggling restaurants with fee caps and winterization grants.
Food delivery apps make most of their money by charging restaurants commissions for delivering food.
GrubHub took a bigger loss in the fourth quarter than last year, even though online orders climbed, as it continued to help out restaurants struggling to stay open during the COVID-19 pandemic.
The food delivery app said it took a net loss for the quarter ending December 31, 2020, of $67.8 million, a decrease from the $27.7 million loss in the same quarter last year, as the pandemic continued to "severely impact" restaurant partners, the company said in its shareholder letter.
"Our priority continues to be doing everything we can to ensure a robust and vibrant restaurant ecosystem for the long-term," the Wednesday letter read. "To that end, we continued to spend tens of millions of dollars on marketing and promotional support to drive more orders."
Despite the increased net loss, the Chicago-based company said, "The strong momentum in our business we have seen all year long carried into the fourth quarter" with active diners and daily orders rising. According to the company's earnings statement, active diners rose 39% from last year to 31.4 million during the quarter. And daily orders rose 31% to 658,000.
The company's planned merger with European food delivery service Just Eat Takeaway.com remains on track to be completed in the first half of 2021, GrubHub said. The deal, which was struck in June, would allow the combined company become the world's largest online food delivery company outside of China.
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