An attorney general from the District of Columbia is suing the delivery service for covert price inflation.
The lawsuit claims that diners are on the receiving end of these shady business practices. Grubhub advertises “free” online orders in addition to “unlimited free delivery” for Grubhub Plus, but the lawsuit argues the company is misleading customers. Despite pickup orders being free, the company does still charge service fees, and had (until recently) displayed this information on a line alongside sales tax.
Attorney General Karl Racine claims that Grubhub was taking advantage of local D.C. restaurants in order to increase its own profits in the wake of the COVID-19 pandemic. Racine alleges that the company charged hidden fees and utilized illegal advertising tactics.
According to the complaint, it’s unclear to consumers that menu prices listed on Grubhub are not necessarily the same prices offered at the restaurant, due to the different types of service fees included in the cost of an order. The company has also taken liberty to add restaurants to its website without explicit permission, in order to take a commission on top of orders routed through its service. It’s alleged that over 1,000 D.C. restaurants who had no affiliation with the company were added onto website which at times included menu errors that could lead to production errors, such as cold or even cancelled orders.
Grubhub intends to fight the lawsuit, stating that its services are either properly disclosed or are discontinued. A statement from the company says the Grubhub app doesn’t list restaurants who haven’t agreed to its services any longer. Moving forward, the company intends to have more prominent messaging centered around making users aware of price discrepancies and the notion that only pickup orders are free.
While this lawsuit highlights Grubhub, it isn’t the only delivery app to have had its practices scrutinized. The city of Chicago sued both Grubhub and Doordash last year in a similar complaint.
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