Grubhub Fees Uncovered: Are They Slicing Into Your Restaurant’s Profits?

Restaurant owners are passionate about serving great food, but dealing with delivery apps is a different story.  

High commissions, additional fees, and shrinking margins make many wonder if partnering with platforms like Grubhub is worth it. And it’s not just owners feeling the pinch. Customers too hesitate to order when fees inflate their order total. As one diner said, ‘Grubhub expects us to cover their drivers since they don’t even pay hourly!’

Yet, with Grubhub connecting over 375,000 merchants across 4,000 U.S. cities, opting out can feel nearly impossible. 

It’s only natural to wonder: how much does Grubhub charge restaurants? 

In this post, we’ll unpack their fee structure, explain its impact, and show you smarter ways to protect your margins while reaching hungry customers.

Overview of Grubhub’s Pricing Structure

When partnering with Grubhub, the upfront commission fee is just the tip of the iceberg. There are additional costs under the hood, making it difficult to see where your money’s going.

What do restaurants pay for? 

• Grubhub commission fees - To cover the operational and administrative costs of running the platform
• Delivery fees - If Grubhub handles delivery, there’s an added cost for ensuring orders reach customers on time. (We’ll explore ways to reduce this later in the article!)
• Marketing costs - While marketing costs like sponsored listings or promotions are optional, many restaurants feel compelled to invest to stay visible and competitive on Grubhub’s marketplace
• Other fees - Premium placements during peak hours, and more

Do these costs pile up, cutting into your profits, or does Grubhub's reach and convenience make it worth the price? 
Let’s unpack their pricing model to know.  

Unwrapping Grubhub’s Pricing Plans

The Grubhub fees for restaurants are split into three pricing tiers, so you can pick the plan that best fits your needs. Here's how they compare:

Basic

• 15% marketing commission rate
• No platform or maintenance fees
• Access to account support
• A free welcome kit
• A custom website for your restaurant  
• A free menu item photoshoot and consultation services
• A Grubhub tablet to manage orders  
• It works with you to integrate orders directly into your existing point-of-sale (POS) system. 

Ideal for: The basic plan is great for new, budget-conscious restaurants testing online delivery for the first time. It gets your restaurant on the radar so you can analyze if it’s helping you reach new customers while bearing minimum marketing spend. ‍

Example: 
Approx. Value of One Order = $50
Approx. Number of orders in a Day=10
Total = $500
‍15% Grubhub Basic Plan Commission (Includes 10% delivery fee) = $75 / Day
                                                                                                               = $2,250  / Month
                                                                                                               = $27,375 / Annum

* excluding the processing, sponsored listing fees, and pickup commission fees

Plus

• 20% marketing commission 
• Access to Grubhub+ diners, a community of Grubhub’s most high-frequency customers 
• All features of the basic plan

Ideal for: You can choose this plan if you want to target Grubhub+ diners who value convenience over costs.‍

Example: 
Approx. Value of One Order = $50
Approx. Number of orders in a Day=10
Total = $500
20% Grubhub Plus Plan Commission (Includes 10% delivery fee)  = $100/Day
                                                                                                               = $3000 / Month
                                                                                                               = $36,500 / Annum

*excluding the processing, sponsored listing fees, and pickup commission fees  

Premium 

• 25% marketing commission + 5% for sponsored listings
• Lower delivery fees for customers
• Enhanced visibility boosts via priority placement in searches and sponsored listings 
• Puts your restaurant in the rotating top three spots on Grubhub Marketplace
• Access to all features of the Plus Plan, including Grubhub+ diners

Ideal for: This plan is best suited for well-established, high-visibility restaurant chains focused primarily on driving order volume. If your goal is to maximize sales without needing additional brand awareness, this option is a solid way to boost revenue.‍

Example: 
Approx. Value of One Order = $50
Approx. Number of orders in a Day=10
Total = $500
Sponsored listing fee (5%) per order = $2.50
25% Grubhub premium plan commission (Includes 10% delivery fee)  = $125 / Day
                                                                                                                      =  $3,750 / Month
                                                                                                                      = $45,625 / Annum

‍*excluding the processing, sponsored listing fees, and pickup commission fees  

25% Grubhub premium plan commission (Includes 10% delivery fee)  
+ 5% sponsored listing fees                                                                    = $150 / Day
                                                                                                        = $4,500 / Month
                                                                                                        = $54,750 / Annum

For those looking to avoid marketplace fees entirely, Grubhub Direct lets you create a branded ordering site without incurring marketing commissions. 

Tip: Start with the Plus Plan to test Grubhub’s impact before upgrading to Premium. Review their pricing thoroughly before choosing a plan!

Breaking Down the Core Fees on Grubhub

Grubhub fees for restaurants can quickly add up. Hence, understanding where your money goes can help you manage costs effectively: We'll break down the fees Grubhub charges both restaurants and customers, giving you a clear picture of the total cost involved in each order. 

What Restaurants Pay

1. Commission Fees 

Grubhub commission rates(also known as marketing rates) fall anywhere between 5% to 20% for each order, depending on your pricing plan. This percentage is applied to the order total (before delivery or other fees). 

Higher-tier plans offer valuable benefits like priority placement in search results and sponsored listings, significantly boosting your restaurant’s visibility to new customers.

In contrast, the basic plan, while budget-friendly, comes with drawbacks. Restaurants on this plan receive lower visibility due to algorithm limitations, pushing them further down in search results. Additionally, while the restaurant pays the standard 10% delivery fee, customers face higher delivery charges, which can impact order volume. 

2. Delivery Fees 

You can either handle delivery yourself, use Grubhub’s service or a mix of both. Here’s how it works:

Self-delivery 

With self-delivery on Grubhub, restaurants receive orders through the platform but handle the delivery themselves using their own staff, vehicles, or third-party couriers. This setup allows for greater control over the delivery experience while still benefiting from Grubhub’s reach and discoverability.

However, relying solely on Grubhub means giving up direct customer relationships. That’s where a direct online ordering platform like Restolabs comes in. While Grubhub helps attract new customers, Restolabs enables restaurants to drive repeat orders, build customer loyalty, and maximize profits without third-party commissions. 

Grubhub delivery 

When you don’t have an in-house delivery team, you can choose Grubhub’s delivery service. The charges start from 10% and vary depending on the customer's location. 

For Grubhub delivery on a $50 order with a 10% fee, you pay $5 as a delivery charge.

While convenient, using this service cuts into your profits, as you’ll pay a 10% fee for every order. The platform also charges customers for delivery. The delivery fee is added to the total order amount during checkout. The exact amount varies based on the distance between the restaurant and the customer. 

Supplemental delivery 

If you need Grubhub’s fleet for orders outside your usual delivery zones or during peak times, you’ll pay an additional 10% fee for timely deliveries.

While this extra fee provides flexibility for busy times, it increases your costs, especially during high-demand periods, potentially reducing your profitability.

3. Advertising Fees

You can opt for sponsored listings so your restaurant appears at the top of search results or in prominent spots on the Grubhub app and website. This increases a restaurant's visibility, making it more likely that customers will see and click on your menu, especially in high-traffic areas or during peak ordering times. 

For a premium plan with a sponsored listing, the marketing fee is typically 20%(15% + 5% ) of the order value. 

Grubhub also offers targeted advertising for restaurants to reach customer demographics based on location, food preference, and order history. Plus it offers loyalty and rewards programs for restaurants to encourage customer retention and repeat business. The marketing fees vary for both these tools. 

4. Processing Fees

Grubhub also deducts a constant $0.30 charge plus 3.05% of the order’s total cost to ensure safe transactions for customers and restaurants. It also covers credit/debit card processing and other payment methods integrated into the platform. 

Now that we know how much the platform charges restaurants, let’s look at charges from a customer’s point of view. 

What Customers Pay :

1. Delivery Fees

Grubhub also charges delivery fees to customers for the convenience of having their order delivered. The fee starts at a minimum of 10% and varies depending on factors like distance, order size, and time of day, customers will see this fee added to their total at checkout. 

2. Service Fees 

While your customers pay these fees, they can indirectly affect your sales. 

These fees support the platform’s operation and customer-facing features, such as order tracking and support. It also helps maintain communication between restaurants, drivers, and customers.

A service fee of 10% adds $5 to a $50 order, increasing the customer’s total to $55. 

High fees may deter customers from placing orders, impacting your revenue.

3. Driver Benefit Fees

Grubhub charges customers a driver benefit fee, which helps cover things for them like the driver's healthcare and insurance. 

Local minimum wage is based on the location where the valet picks up an order. For example under Prop 22 California law, they’re paid $0.34 per mile compensation during an active delivery period.

4. Tipping Drivers 

Tips are intended for the drivers. While customers can tip any amount based on their satisfaction, Grubhub typically recommends a tip of around 20% of the order value to ensure they’re fairly compensated. 

5. Minimum Order Fee

Grubhub has a $12 minimum order requirement. If a customer tries to order less than that, they’ll be charged the difference to meet the minimum.

There have also been multiple reports of Grubhub charging restaurants even when no orders are placed, with several lawsuits highlighting this practice.

For example, a $17 turkey on rye half-sandwich from Langer’s Delicatessen-Restaurant in Los Angeles, ordered through Grubhub, ballooned to $26 at checkout. Extra fees and sales tax contributed an additional $9 to the order total.

As a result, both customer satisfaction and restaurant profitability suffer.

This brings us to the next question: How much does Grubhub take per order?

Calculating the Total Cost of an Order

Now let’s break down how much Grubhub takes from an order. Let’s say a customer orders a $50 dish through Grubhub. We’ll look at the costs for both the restaurant and the customer.
Restaurant charges breakdown: 

‍

Customer charges breakdown:

While the restaurant makes $33.20 from a $50 order, Grub Hub makes [$16.8 from the restaurant and $20.9 from the customer] close to $38 per order more than what a restaurant makes. This highlights how third-party platforms can significantly eat into your profits. 

Note: You can ditch the marketplace for an in-house online ordering system and save your profit margins from being eaten away. 

What Grubhub’s Commission Structure Means for Your Restaurant

Grubhub provides broad exposure, but its costs can quickly add up.

1. Tiered Visibility  

Higher-tier plans offer better visibility, including higher search rankings and premium placements, but at a higher cost. Larger restaurants with steady orders can benefit, while smaller or niche establishments may struggle without consistent traffic. As order volume grows, so does the commission expense, requiring careful evaluation of whether the increased visibility justifies the cost.

2. Delivery Fees Hurting Customer Retention 

Restaurants using Grubhub’s delivery service face a 10% minimum commission, which can rise based on factors like distance and order size. While this affects profit margins, customers also pay higher delivery fees, leading to higher total costs. As a result, customers may reduce order frequency or seek alternatives, impacting retention.

3. Driver Benefit Fees and Tipping Expectations Affecting Sales

Grubhub charges customers driver benefit fees to fund perks like healthcare and insurance, which can discourage purchases. Additionally, the platform recommends a 20% tip, raising overall costs and causing customers to hesitate before ordering. For restaurants, this means fewer orders, lower sales, and weakened customer retention.

Is there a way to reduce these fees? 

3 Tips to Manage and Reduce Grubhub Fees

Use Grubhub Delivery in High-demand Areas  

Use their delivery fleet to cater to high-demand areas to drive sales. For less-demand locations, you can choose alternatives like self-delivery or third-party services. When you adjust your delivery zones strategically, it’ll help you maintain quality service while reducing unnecessary fees.

Balance Marketplace Apps with Your Direct Ordering Platform

Use limited-time promotions on Grubhub or other third-party apps to attract first-time customers—such as “10% off first orders” or a free appetizer for new users. 

Once they’ve ordered, use your direct online ordering platform to turn them into repeat diners with loyalty programs, personalized offers, and exclusive discounts. This strategy helps maximize initial exposure while building long-term customer relationships on your terms. 

Adjust Menu Pricing 

Restaurants can strategically adjust pricing on third-party platforms to offset commission fees without deterring customers. Instead of a flat markup, they can slightly raise prices on high-margin or less price-sensitive items while keeping popular staples competitively priced. Bundled deals, like an entrée with a side and drink, enhance perceived value while covering additional costs. 

At the same time, maintaining lower prices on direct ordering platforms encourages customers to order directly, helping restaurants maximize profitability and build long-term customer loyalty.

Is Grubhub the Right Choice for Your Restaurant?

Now that you have a clearer picture of the Grubhub commission rates, the next step is deciding whether it’s the right fit for your restaurant. Let’s break it down:

• Grubhub connects your business with a large and active customer base, boosting visibility and generating consistent orders.
• Compared to competitors like DoorDash and Uber Eats, Grubhub generally offers slightly lower commission rates, making it a budget-conscious choice for many restaurant owners.

If your goal is to expand your customer base and reduce operational burdens, Grubhub can be a valuable partner. But is there a better way to maximize profitability?

While Grubhub is great for acquiring new customers, relying solely on third-party platforms can chip away at your profit margins. To truly take control of your revenue, consider supplementing Grubhub with a direct online ordering system like Restolabs.

This hybrid approach offers the best of both worlds: Grubhub’s extensive reach while building direct, commission-free relationships with loyal customers. In fact, one restaurant owner with Grubhub’s premium service generated over $250,000 in sales from new customers by using it as a supplemental source of income. 

With Restolabs, you can:

• Cut out third-party commission fees, saving up to 30% per order
• Gain valuable insights into your customers’ preferences to create targeted marketing campaigns and loyalty programs
• Use your drivers or integrate third-party fleets as needed
• Offer QR code ordering for in-restaurant convenience and integrate POS systems to simplify operations

This strategy has already worked for restaurants like Pizza Pirates. Known for its pizzas, steaks, and sandwiches, the restaurant adopted Restolabs to complement its delivery platforms. Within months, the restaurant saw a striking 600% increase in online sales. 

While third-party platforms like Grubhub are valuable, combining them with a direct ordering system gives you the edge. This strategy lets you maximize reach while keeping costs in check and nurturing lasting customer relationships.

Ready to take control of your profits? Book a demo today and see how Restolabs can help achieve sustainable growth.