Grubhub's delivery lessons

The onetime US delivery leader is back in the news after cutting hundreds of jobs last week. Here's how we got here.

photo credit: Gary Hershorn / Getty Images

Late last week, Grubhub CEO Howard Migdal announced the company would cut 500 jobs, a reduction of more than 20 percent of the company’s workforce. It comes just a few months after Grubhub’s $650 million sale to Wonder, a food and delivery startup run by successful serial entrepreneur Marc Lore.

Grubhub, an early leader in online ordering and delivery, hasn’t had the best decade. Its early success was later overshadowed by younger upstarts that went on to eclipse its market share. But at over 20 years old, Grubhub was an early pioneer of a service we’ve come to rely on, and even restaurant technology dinosaurs deserve their due.

Last week’s layoffs mirror the corporate downsizing common over a few years of tumultuous market conditions, especially for the restaurant industry. Still, Grubhub has proved a foundation for newer third-party delivery services, and the events of the industry’s earliest days are critical to understanding where the business is heading.

In hindsight, it’s easy to assign weight to a company’s biggest moments. But in over a decade of covering this tiny slice of American industry, I’ve witnessed how Grubhub’s wins, losses, and stumbles have shaped food delivery as we know it.

Here’s a timeline of the company’s trajectory, including the biggest takeaways from the biggest events in its history:

2004: Grubhub is founded by Matt Maloney and Mike Evans.

What did we do before online delivery services? Most of us had a drawer stuffed with takeout menus and a fridge magnet from a local pizzeria. Two Chicago-based software engineers hoped to disrupt paper menus, launching Grubhub to help restaurants take online orders.It would go on to raise a handful of funding rounds, including from Benchmark Capital, a VC firm that also backed eBay and AOL and even Potbelly Sandwich Shop around the same time.

Like other growth-seeking tech companies, Grubhub eventually bought up related services, including DotMenu, a New York-based food delivery network. At the time, its biggest competition came from New York’s Seamless, founded in 1999 and the top player in delivery’s crown jewel of a city.

May 2013: Grubhub and Seamless merge

It was the most high-profile delivery deal to date.