I-Team Finds More ‘Ghost Restaurants’ After GrubHub Vows Procedural Overhaul

Food delivery site GrubHub, which also owns Seamless, says it has overhauled its restaurant verification process and verified nearly 11,000 of the New York City restaurants listed on its site following an I-Team investigation that found many restaurants listed on the popular sites appeared to be "ghosts" in that there was no actual restaurant at the physical locations listed online.

But the I-Team checked into it last week -- and found that at least some ghost restaurants continue to do business in the city.

The I-Team visited Mike’s Bistro Asian Fusion on West 72nd Street after failing to find the restaurant listed on the city Department of Health’s restaurant grading website. The I-Team found a restaurant with a Mike’s Bistro sign that was closed with a “for lease” sign up and paper covering the windows.
But when the I-Team ordered edamame and vegetable dumplings from Mike's Bistro on Seamless, a delivery man arrived within minutes. But he didn’t come out of Mike’s Bistro; he came up 72nd Street on a bike.

The delivery man couldn’t tell the I-Team where our dumplings had been cooked or where he had come from. When The I-Team called the phone number listed for the restaurant on Seamless, the person who answered hung up as soon as the I-Team started to ask questions.

The I-Team found that the Mike’s Bistro that once occupied the 72nd Street address moved to 54th Street more than a year ago. When the I-Team visited them at their new location, they were shocked to see a takeout bag from the other Mike’s Bistro.

"This is definitely not my food," said David Zinstein, manager at Mike's Bistro on 54th Street.

Zinstein said his restaurant is Kosher, and would never serve Crab Rangoon or Pork Chops, which are listed on the Mike’s Bistro Asian Fusion website.

"We try to hold a very high standard. Especially in the Kosher world -- which has to be Kosher food ... anything saying Mike's Bistro could affect our business," Zinstein said.

After the I-Team questioned GrubHub about Mike’s Bistro Asian Fusion, the company pulled the listing off its website, saying it could not verify it with the city Department of Health. Health officials said they have no record of permits for the restaurant.

GrubHub also took down a second listing, for Bei Jing Restaurant on First Avenue, after the I-Team found the physical address empty and no listing with the Department of Health. Health officials confirmed that they have no record of permits for that restaurant either.

GrubHub says since the I-Team first reported on ghost restaurants in November, it requires all U.S. restaurants to confirm that they are in good standing with their local health authority.

In New York City, the company says it checks every new New York City restaurant against the city's Department of Health database.

“GrubHub has taken swift, aggressive action to further ensure the accuracy of our restaurant listings. In less than two months, we have verified that nearly 11,000 restaurants are in good standing with the NYC Department of Health," a spokeswoman said in a statement. "This process included the manual verification of more 1,520 restaurants. In tandem with this process, we have implemented a new step in our validation process for all new restaurants on the platform."

The Department of Health said in a statement that it is working with Seamless and GrubHub to identify and remove restaurants that might be operating as "unpermitted food service establishments."

"When we receive a complaint of an unpermitted restaurant we ask food delivery services to remove these entities from their online listings, in addition to taking other enforcement measures," the agency said in a statement. "Seamless and GrubHub have been responsive to our requests to remove unpermitted establishments from their listings and they have continued to collaborate with us on this issue." 

When the I-Team first reported on ghost restaurants, Julie Menin, commissioner of the city's Department of Consumer Affairs, said her office has also found ghost restaurants using unregistered names and false addresses. She believes some of the Seamless and GrubHub ads may actually be fronts for unregulated kitchens.

"Some people might be illegally operating from their apartment, from their home, and delivering to people in complete contravention to department of health regulation," Menin said at the time.

Michelle Jones, a restaurant consultant who helps keep kitchens in compliance with the law, says Seamless and GrubHub have no legal responsibility to verify names and addresses of restaurants, but the sites may risk losing customers' trust.

“Consumers need to be able to trace back where their food comes from in the event that they get sick,” Jones said.

Back at the registered Mike's Bistro on 54th Street, Zinstein said some strange recent occurrences are now making sense.

A few weeks ago he received a welcome package from Seamless even though his restaurant doesn’t use the platform. He has also found his restaurant’s name on MenuPages, attached to a menu listing sushi and other foods his restaurant doesn’t carry. 

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