Grubhub Class Action Claims Company Deceives Customers, Restaurants in Several Schemes

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Grubhub Hidden Fees Lawsuit Overview:

• Why: DC alleges that Grubhub engages in several deceptive and unlawful practices.
• Who: The District of Columbia is suing Grubhub.
• Where: The lawsuit was filed in District of Columbia superior court.

The District of Columbia is suing Grubhub for “unfair and deceptive” practices, including creating fake restaurant websites and pushing costs onto restaurants even during its COVID-19 “Supper for Support” promotion.

Filed by DC’s Attorney General Karl A. Racine, the lawsuit details eight specific practices that indicate Grubhub’s disregard of “consumers’ right to truthful information at every step of the process.” 

The lawsuit sees Grubhub’s alleged behavior as “an apparent effort to optimize its revenue.” In 2020 alone, Grubhub generated about $1.8 billion in revenue, according to court documents.

Racine seeks restitution, civil penalties, other relief and “to permanently enjoin these deceptive business practices.”

Grubhub Allegedly Misrepresents Fees, Ordering Options to Consumers

The lawsuit calls out Grubhub’s “bait-and-switch scheme” in which it told customers that they would only have to pay Grubhub a delivery fee while “deceptively obscuring” its service fee and, if applicable, small order fee for orders less than $10.

Even Grubhub+ customers, who pay $9.99 per month and are promised “unlimited free delivery,” have to pay the service fee on delivery orders, according to the lawsuit.

Grubhub also “deceptively advertises” that customers can “order online for free” although this applies only to pickup orders. 

The lawsuit also claims that Grubhub often displays incorrect local prices despite advertising local restaurants’ menus.

Grubhub Allegedly Fails to ‘Adequately’ Disclose Deceptive Practices

Grubhub also deceived restaurants. Grubhub lists over 1,000 restaurants on its platform that do not have a contractual relationship with Grubhub “without the restaurants’ consent and without adequately disclosing to consumers” the lack of relationship, the lawsuit says. 

GrubHub also created “Routing Telephone Numbers” and hundreds of “microsites” each meant to look like a restaurant’s own phone number or website. Orders made through these outlets were still funneled through Grubhub, which then charged restaurants a separate commission “without adequately disclosing that fact to consumers,” according to court documents.

Finally, Grubhub took advantage of the pandemic-related rush to support local businesses with its “Supper for Support” promotion in which consumers were promised a discount on select orders. “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,” the lawsuit says. The restaurants were also responsible for paying commissions on the full price before the discount.

Have you used Grubhub and been surprised by fees at the end? Leave a comment below and tell us about your experience!

The District of Columbia is represented by Karl A. Racine, attorney general for the District of Columbia, et al.

The Grubhub Hidden Fees Lawsuit is District of Columbia v. Grubhub Holdings Inc. et al., in the Superior Court of the District of Columbia. 

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