Attorney General Karl Racine from Washington DC has filed a lawsuit against the food delivery company Grubhub due to alleged hidden feed and deceptive trade practices.
Atty. Racine's office has accused the food delivery company of violating the jurisdiction's Consumer Protection Procedures Act eight times.
Grubhub Accused of Deceptive Trade Practices
Atty. Racine announced the decision to sue Grubhub on Twitter and said that Grubhub has misled District residents and took advantage of local restaurants to boost its profits. He added that Grubhub charges hidden fees and uses bait-and-switch tactics while pretending to help local businesses during the pandemic.
NEW: We're suing Grubhub for misleading District residents and taking advantage of local restaurants to boost its own profits.
— Archive: AG Karl A. Racine (@AGKarlRacine) March 21, 2022
Grubhub charges hidden fees and uses bait-and-switch tactics, all while pretending to help local businesses during the pandemic. This needs to stop.
Atty. Racine's office also claims that the food delivery app charged users higher prices than the normal pay in restaurants. It also misrepresented an offer of unlimited free delivery via the Grubhub+ subscription since the customers still had to pay a service fee.
The lawsuit also alleges that Grubhub offered deliveries from more than 1,000 eateries in the area even without the permission of the restaurants on the list.
The company is also accused of listing phone numbers for restaurants that were routed to Grubhub workers, creating websites for restaurants without their knowledge, and disclosing that it operated the sites even though they didn't.
According to TechCrunch, Grubhub has already ended those practices, but the lawsuit will push through.
Supper for Support Program.
Atty. Racine said that in one of the food delivery app's tactics, at the peak of the coronavirus pandemic, it ran a discount called "Supper for Support," advertising that wanted to help struggling restaurants but eventually stuck them with the bill. The program cut into the restaurants' profit margins.
The promotion allowed restaurants to offer their customers a $10 discount on orders that were over $300, but they had to cover the cost. Grubhub later offered them a $250 credit.
Grubhub released a statement and said that their practices have always complied with DC law, and many of the practices that were mentioned in the lawsuit have been discontinued, according to Engadget.
The company added that they would defend the business in court and continue their operations in DC while settling the lawsuit.
Grubhub also said that it has worked with Atty. Racine and his office in 2021 to address those concerns. After the lawsuit was filed, the food delivery app has added disclaimers about service fees for Grubhub+ subscribers and even wrote that the prices may be lower at restaurants than in the app.
Grubhub also plans to make it clearer that users can place orders for free through the app and the company's website as long as they pick up the food themselves because if not, they will be charged a service fee for delivery. The changes will apply to all users, not just those in DC.
The DC lawsuits are the latest in a number of legal battles that food delivery apps are facing. Chicago has also filed a lawsuit against Grubhub and DoorDash for deceptive delivery fees.
In September 2021, DoorDash, Grubhub, and Uber Eats filed a lawsuit against New York City for limiting the fees they can charge the restaurants.
In the same month, New York City passed six bills to protect Uber Eats and Grubhub delivery drivers from intense working conditions.
Related Article: Uber Eats Pushed By Attorneys General in Two States to be Transparent With Food Costs Upon Checkout
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Written by Sophie Webster
