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Monday, January 16, 2017

GrubGo Shuts Down, Stranding St. Louis Restaurants With Bills Past Due

Posted By on Mon, Jan 16, 2017 at 12:17 PM

click to enlarge Layla is one of the St. Louis restaurants affected by GrubGo's closure last week. - COURTESY OF LAYLA
  • Layla is one of the St. Louis restaurants affected by GrubGo's closure last week.

St. Louis-based food delivery service GrubGo shut its doors last week — but it's how those doors were shut that have local restaurant owners fuming.

Some restaurateurs say they received no notice of the closure. Others say they are owed significant amounts of money: GrubGo would collect money from customers ordering food, but then fail to later remit it to restaurants. They've been told by sympathetic GrubGo employees that the business' owner, Peter Wheeler, left only a post office box number for future contact, making them wonder if they'll ever be made whole.

"He's really burned some bridges," says Jason Sparks, whose restaurant, Layla, is one of those affected. "Restaurant people aren't ones to mess with when it comes to money. We're working on such slim margins — this is really going to hurt some businesses."

GrubGo's attorney, Paul Seele of Clayton, did not return a call seeking comment this morning.

GrubGo opened in 2012 with dreams of delivery domination. In an interview with St. Louis Magazine, owners Gary Tripp and Matt Hanley promised not only to deliver food at a good price, but to be the "greenest delivery service in the country" by purchasing carbon credits and also to keep customers entertained, with "80s-style video games" on their website "to help pass the time" (yes, really). They planned to expand to Columbia, Metro East and Chicago, they told the magazine.

GrubGo did later open in Kansas and Wisconsin, and boasted 100 St. Louis restaurants as partners as recently as last year. And even as a host of similar services with a national footprint that flooded the market, including GrubHub and Postmates, GrubGo seemed poised for continued success thanks to a series of partnerships: When customers ordered off GrubHub, for example, it was often GrubGo that actually took the order and handled delivery.

Increasingly, though, restaurateurs say GrubGo left them hanging. While some other sites remitted customers' payment to restaurants via direct deposit at the end of a week, GrubGo still paid up by check, and not with the frequency, or regularity, desired. For some restaurants, that meant cooking and preparing numerous meals, yet not getting paid for them for a month — a real problem in a business that generally leaves no margin for error.

Chesterfield attorney Bryan Kaemmerer says that GrubGo owed his client, Sushi Station in Webster Groves, around $10,000 when he began reaching out late last year to demand payment. Kaemmerer says he received an email from GrubGo's attorney on December 30, 2016, saying that the company had racked up "significant debts" beyond its resources. Still, the email promised partial payment.

When none was forthcoming, Kaemmerer reached out again last week. In response, he received an email on January 9 saying the company would not be paying. It was instead going out of business. (Kaemmerer says he's now looking into whether Sushi Station can file a claim against Wheeler as an individual.)

Other restaurants didn't even get that abrupt notification. Sparks says he'd been frustrated with GrubGo's slowness of payment, and forced them onto a plan to pay up every few weeks instead of once a month. Still, Layla continued to handle GrubGo orders.

Then, last Friday, he got a call from the national service GrubHub. A customer had placed an order several hours before through the site's partnership with GrubGo. It had yet to be filled, the GrubHub rep told him. What was up?

That's when Sparks realized that Layla had never even gotten notification of the order — and that he hadn't gotten an order all day from GrubGo, which was unusual. "I got off the phone with the rep and called GrubGo," he says. "The number said their voice mail was full." Only later that day, by texting with a GrubGo staffer, did he learn that GrubGo had shut down completely.

He is frustrated, and it gives him no peace of mind to know that he's far from alone.

"Peter owes me over $2,000," he says. "And I'm sure I'm the least of it."

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