Lawsuit: Grubhub Tricks Customers with Hidden Fees, Misleading Ads

The District of Columbia is suing Grubhub for deceptive trade practices, claiming that the company has exploited both customers and restaurants. According to the lawsuit, “The company deceived users with a promotion that claimed to support local restaurants during the heart of the pandemic. But in reality, this program cut into struggling restaurants’ profit margins while padding Grubhub’s bottom line.”

Mashable reports that the District of Columbia is suing Grubhub for deceptive trade practices, claiming that the food delivery company has exploited customers and restaurants. A lawsuit filed in the Superior Court of the District of Columbia on Monday alleges that Grubhub repeatedly violated D.C.’s Consumer Protection Procedures Act.

Attorney General Karl A. Racine in a statement: “Grubhub misled District residents and took advantage of local restaurants to boost its own profits, even as District consumers and small businesses struggled during the COVID-19 pandemic. Grubhub charged hidden fees and used bait-and-switch advertising tactics — which are illegal.”

The lawsuit claims Grubhub engaged in eight misleading and deceptive practices, including listing thousands of restaurants on its platform despite not entering into a contract with them or gaining their consent. Other claims include listing higher menu prices on Grubhub than the same item directly from the restaurant and failing to inform customers of the price increase, and failing to disclose Grubhub’s “service fee” and “small order fee” until the end of the ordering process.

Racine stated: “The company deceived users with a promotion that claimed to support local restaurants during the heart of the pandemic. But in reality, this program cut into struggling restaurants’ profit margins while padding Grubhub’s bottom line.”

The suit is requesting a jury trial and seeks orders prohibiting Grubhub from engaging in false, misleading, or deceptive practices as well as damages, penalties, and costs. In 2019, Grubhub was criticized for purchasing domain names that resembled those of particular restaurants without the restaurants’ involvement. Last year, the city of Chicago sued Grubhub and DoorDash for “unfair and deceptive” practices.

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