D.C. Attorney General Karl Racine is suing food delivery company Grubhub, alleging that the company has been charging hidden fees and uses "deceptive marketing tactics" to pad its profits.
The lawsuit filed Monday levels a long list of accusations against Grubhub, alleging its practices harm customers and local small restaurants. Along with alleging the company tacks on deceptive fees, including small-order fees and service fees, and uses "bait-and-switch" advertising practices for its free online ordering, the attorney general also claims the company inflates prices on menu items that can be found cheaper elsewhere, including by ordering directly through the restaurant itself.
"Because Grubhub already charges consumers several different types of fees for its services, such as a 'delivery fee' and a 'service fee,' consumers expect that the menu prices listed on Grubhub are the same prices offered at the restaurant or on the restaurant’s website — an expectation Grubhub fails to correct through sufficient disclosures," the lawsuit claims.
The lawsuit also alleges that Grubhub falsely claimed to help struggling restaurants during the pandemic and lists restaurants that don't actually use its platform. According to the complaint, "thousands of D.C. restaurants" are listed on Grubhub's app without their consent.
“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,” Racine said in a statement.
Racine also alleges that Grubhub created "fake websites that funneled users" to its platform from 2011 through 2018, where it impersonated D.C.-based restaurants through duplicate sites as well as listing them on their platform. The company also allegedly created and listed "Grubhub-generated phone numbers" for some of its partner restaurants, misleading those restaurants' consumers to believe that they were contacting the restaurants directly.
In a statement to Protocol, Katie Norris, director of corporate communications for the company, said that she is "disappointed [the OAG] have moved forward with this lawsuit because our practices have always complied with DC law, and in any event, many of the practices at issue have been discontinued. We will aggressively defend our business in court and look forward to continuing to serve D.C. restaurants and diners.”
Grubhub owns a host of other food delivery platforms, including Seamless, and operates in 4,000 cities.
Climate TRACE's data show emissions at the facility-level.Image: Climate TRACE