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Grubhub sued by Washington, D.C. for excessive fees and false advertising

The lawsuit accuses the delivery giant of “deceptive practices,” including restaurants added to the Grubhub platform without consent

The District of Columbia is accusing Grubhub of deceptive business practices, according to a lawsuit filed Monday. The lawsuit claims that Grubhub deceives both customers by obscuring fees and failing to disclose menu practice increases, and restaurant operators by adding them to the Grubhub directory without their consent.

“We are seeking to force Grubhub to end its unlawful practices and be transparent so D.C. residents can make informed decisions about where to order food and how to support local businesses,” D.C. Attorney General Karl Racine said in a statement sent to the Associated Press.

According to the lawsuit, there are 1,000 “partner restaurants” in the Washington, D.C. area that are listed on the app that don’t currently have contracts with Grubhub. According to the lawsuit, the company was also deceptive in how it listed promotions:

“Grubhub deceptively marketed its Supper for Support promotion to consumers as a way for them to save money, while at the same time supporting local independent restaurants that had been affected by the decline of business due to the COVID-19 pandemic,” the lawsuit said. “The promotion advertised that consumers who placed orders from 5 p.m. to 9 p.m. each day, during the promotion, with any of Grubhub’s participating Partner Restaurants would receive $10 off their orders of $30 or more. However, contrary to its advertisements, this promotion did not actually support restaurants—as the restaurants, not Grubhub, were required to foot the full cost of the $10 off promotion.”

Grubhub, however has denied the allegations in this lawsuit and has said it will be fighting the accusations in court. Grubhub told the Associated Press that it complies with current D.C. laws and have stopped many of the practices outlined in the lawsuit.

“During the past year, we’ve sought to engage in a constructive dialogue with the DC attorney general’s office to help them understand our business and to see if there were any areas for improvement,” Grubhub said in a statement sent to media outlets. “We are disappointed they have moved forward with this lawsuit […] We will aggressively defend our business in court and look forward to continuing to serve DC restaurants and diners.”

This is just the latest example of legal clashes between city/state authorities and third-party delivery companies. The city of Chicago similarly sued Grubhub over deceptive business practices last summer with an amended complaint published last month, and restaurants just filed a lawsuit against Alphabet Inc’s Google for intellectual property right infringement and using “deceptive online ordering practices” to list restaurants in digital storefronts without their consent.

Contact Joanna at [email protected]

Find her on Twitter: @JoannaFantozzi

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