At 11 a.m. on Tuesday, May 17, chaos ensued when GrubHub (OTC: JTKWY) began its "free lunch" promotion in New York City. When the three-hour event was over, thousands were left with unfulfilled orders, restaurants throughout the city were left reeling from the sudden explosion in orders, and GrubHub seemed to be the only one surprised by the outcome.
"It's clear, New Yorkers were hungry for lunch!" GrubHub said in a statement after the event. "While we knew 72% of New York workers call lunch the most important meal of the day, our free lunch promotion exceeded all expectations."
The promotion was related to a recent GrubHub survey that asked users about their eating habits and preferences.
According to the company's statement, the recent promotion, which gave each user in NYC access to a $15 promo code, saw six times the number of orders the platform received during a similar event last year. At its peak, the event was bringing in 6,000 orders every minute.
GrubHub acknowledged that the initial surge in orders caused the app to show customers an error message when they tried to order, but also said that the issue was later resolved. However, even users who were able to order again rarely got their food.
The food delivery company didn't give the restaurants on its platform any warning before starting the "free lunch", and stores were quickly overwhelmed. Restaurants already facing staffing issues reported getting five times as many GrubHub orders in just one hour than they normally do in a whole day.
Some users said their orders were canceled by vendors, but the majority said they waited for their orders for hours before finally canceling the purchases themselves. Some restaurant workers told reporters that trying to pause the app didn't work, and the orders just kept coming.
On top of all the orders that never got started, there were countless orders left wasted because of mismatches with delivery drivers or because there were no drivers to pick them up.
The promotion did have some positive effects. After all, some people did get their free lunch. Also, to place an order on the app, users have to enter their contact info, so many struggling New York businesses now have a new or expanded avenue for marketing. Many restaurants that had been facing low traffic received an influx of demand.
New York represents 37% of all U.S. GrubHub users, more than any other U.S. city. Still, restaurant owners interviewed about the "free lunch" event said that they don't usually receive many orders from the app, at least on a normal day.