A sweet incentive turned sour after restaurants were not able to successfully fulfill the "overwhelming demand" prompted from Grubhub's 'FREELUNCH' promotion in New York City on Tuesday.
The promotion, which occurred between 11 a.m. and 2 p.m. ET on May 17, allowed New York City residents to use the promo code FREELUNCH at checkout in the Grubhub app for up to $15 off their order.
Eager customers immediately took advantage of the deal, but restaurant owners were ill-prepared for what was to come.
"We were hit right at 11 AM with 25 times our normal amount of orders with no way to deliver them," Chad Vignuelle, the owner of Harlem Public on Broadway and 149th Street, told Yahoo Finance. "We use a third-party delivery company whose drivers were so slammed they just would shut off their app because they could not deal with the amount of orders."
Vignuelle added that "I have no idea who thought it would be a good idea to offer free lunch to one of the largest metropolitan cities in the world, during the same exact 3-hour timespan. It's unbelievable really."
According to Vignuelle, restaurant owners like himself were not notified about the promotion "or the magnitude of what it would be" with enough time to make adjustments.
Following the influx of orders, Vignuelle said he received angry calls from customers yelling about not receiving their orders.
"They don't understand the underlying problem of this is that there are just simply not enough drivers in the city to deliver all of these orders," he said. "The customers then call Grubhub and demand and receive their refund. All that means is we don't see the money on the orders that were all made but failed to be delivered."
In a statement to Yahoo Finance, a spokesperson for Grubhub said: "To help businesses prepare for yesterday’s promotion, we gave advance notice to all restaurants in our network, which included multiple forms of communications across various platforms. We also increased driver incentives to help support demand."
The spokesperson noted that the app saw an "unprecedented demand" in the three-hour window. The 'FREELUNCH' promotion was redeemed six times higher than a similar promotion 2021, "which had a higher promotion value" with the app averaging 6,000 orders per minute. In total, more 450,000 orders were successfully filled using the promotion.
"Even with that preparation, there was unfortunately strain on some restaurants due to the unprecedented demand," the Grubhub spokesperson said. "However, we’ve already been hearing from many of our partners about how this was a success and a positive boost to their business. We have great learnings to help us optimize and mitigate this in the future."
Brooke DiPalma is a producer and reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at email@example.com.