However, GRUB expanded its platform to include its own delivery fleet for restaurants. The restaurant was responsible for delivery in this model, typically using a small local contractor. The company took ~15% of transaction value for obtaining the online customer order and routing it to the restaurant.

Restaurants would place menus on GRUB's websites and customers would place orders through the online GrubHub portal. GRUB historically ran an online restaurant order aggregator in the US, primarily through the brands GrubHub and Seamless. We think this is just the tip of the iceberg. The pressures have already been reflected by increasing CAC and a 4Q16 earnings pullback for lower-than-expected margin guidance for 2017. Despite big growth as a first-mover to the large online food and delivery service market, GRUB's business model is defenseless despite its perceived 'network effect.' GRUB's projected growth runway will be eaten up by competing products from goliaths: Uber and Amazon ( AMZN), which can both offer lower prices to consumers and operate at zero profitability to steal market share. (GRUB) is an over-hyped growth stock whose growth prospects are misunderstood by the market.

Difference between seamless and grubhub