The state of Massachusetts and Grubhub have reached a settlement in the state attorney general’s 2021 lawsuit against the third-party delivery company for repeatedly violating the Massachusetts pandemic-era delivery fee caps. In March 2023, Suffolk Superior Court ruled in favor of Massachusetts, alleging that Grubhub had violated the state’s 15% fee cap, in effect from Jan. 2021 until June 2021.
Grubhub agreed to pay $3.5 million to affected restaurants and $125,000 to the state for allegedly charging restaurants 18% or more in delivery fees when the state limited delivery fees to 15% until the state of emergency was lifted.
“Grubhub unlawfully overcharged and took advantage of restaurants during a public health emergency that devastated much of this industry,” Massachusetts state attorney general Andrea Campbell said in a statement.
Massachusetts was one of several states and cities that fought pandemic-era delivery fees that many third-party delivery companies implemented throughout 2020 and 2021. New York City and San Francisco both instituted fee caps of 20% and 15%, respectively, —although theirs were permanent and did not end as the pandemic ebbed — which in turn, caused the major third-party delivery companies to sue both cities over the “irrational law.” The delivery companies have previously been sued for multiple price-related issues, including a lawsuit last year that claimed anti-trust violations.
In this case, Grubhub has maintained its innocence in following the fee cap laws in 2021.
“Serving restaurants is at the heart of everything Grubhub does, and our success depends on these valuable merchant partners,” a Grubhub spokesperson said in a statement. “While we have always complied with Massachusetts’ temporary price control, we’re ready to move forward from this situation and continue providing Massachusetts restaurants with the best possible service.”
Restaurants who are eligible to receive settlement from this lawsuit will be contacted, Campbell said.
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