D.C. attorney general sues Grubhub, accuses delivery firm of 'deceptive' practices

22 March 2022

The District of Columbia is suing Grubhub, claiming the food-delivery service misleads customers and takes advantage of local restaurants.

The lawsuit, filed Monday by the Office of the Attorney General in D.C. Superior Court, alleges that Grubhub “employed a number of unfair and deceptive practices” to promote their service.

The suit claims Grubhub failed to disclose when it charged more than the restaurants themselves and obscured those higher charges and additional fees with deceptive practices on its website checkout page.

Attorney General Karl Racine tweeted Monday accusing Grubhub of “advertising free services that aren’t actually free.”

NEW: We’re suing Grubhub for misleading District residents and taking advantage of local restaurants to boost its own profits.

Grubhub charges hidden fees and uses bait-and-switch tactics, all while pretending to help local businesses during the pandemic. This needs to stop.

— AG Karl A. Racine (@AGKarlRacine) March 21, 2022

The lawsuit also alleges that the Chicago-based firm “deceptively marketed” its “Supper for Support” promotion in March and April 2020.

At the start of the pandemic, Grubhub offered discounts to encourage users to order and ran ads saying, “restaurants need us now more than ever.”

But Grubhub didn’t cover the costs of the deals — they passed them back to the restaurants, according to the suit.

“This promotion severely cut into restaurants’ already-small profit margins and misled DC residents who believed their orders through Grubhub would help their favorite restaurants,” the Office of the Attorney General said in a statement Monday.

Grubhub called the lawsuit “frivolous” in a statement released Monday.

Grubhub claims that all applicable fees are outlined in the company’s Terms of Use — which every user agrees to before they use the platform.

Grubhub pointed to the Terms of Use as a rebuttal to several of the lawsuit’s claims. But the company said it would increase transparency moving forward.

According to the company, all fees are disclosed in the order/checkout flow, in order confirmation receipts and marketing materials.

From now on, Grubhub will individually list each applicable fee on the checkout page and give users a description of the fee.

They will also advertise that diners can pick up their online orders for free to eliminate confusion with delivery fees. The company will clarify the costs for Grubhub+ members, adding that Grubhub+ members receive free delivery on orders over $12, but that service fees may apply.

“We will aggressively defend our business in court and look forward to continuing to serve DC restaurants and diners,” a Grubhub spokesperson said.

• Peter Santo can be reached at psanto@washingtontimes.com.

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