Yelp is giving up on food delivery. Two years after buying Eat24, Yelp has agreed to sell the food ordering service to GrubHub for $287.5 million — a little more than double what it bought the company for.
The sale, which still faces regulatory approval, means that Yelp is out of the food ordering business, and likely for good. Yelp also agreed to integrate GrubHub into its site and apps for at least five years, so that its users have a way to place orders without jumping over to another app. That’ll continue to strength GrubHub’s grip on the market, while Yelp merely tries to remain useful as a directory for restaurant information.
Eat24 was never much competition to GrubHub anyway. GrubHub also owns Seamless, AllMenus, and MenuPages, accounting for some of the best known food ordering services in the US. And while plenty of other big tech companies have tried to get in on the action — like Uber, with its UberEats program — none have made nearly as much of an impact on ordering as GrubHub’s companies have.
Even though consumers don’t seem to have been using Eat24 that much, the big downside to this acquisition is that GrubHub really will have a stranglehold on the market now that one of the last remaining large competitors is backing out. That’ll give it even more power over restaurants, which may have to put up with increasingly onerous terms as a way to reach GrubHub’s large user base.