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The lawsuit alleges that Grubhub hid its fees, listed more than 1,000 restaurants on its platform without contracts with those companies, and charged higher prices than the restaurants charged without disclosing such information to consumers. Claimed to have charged often.
According to the Attorney General’s Complaint, Grubhub is a decoy by stating that it only pays its customers “delivery charges” and adding “service charges” and “small order charges” to many orders on its checkout page. He is involved in commercial law. After a customer struggles to choose a restaurant or menu item.
“Grubhub used all the tricks in the book to manipulate customers into paying far more than they should have. And they did,” said Racine (D). in Friday’s news release. “Grubhub’s hidden fees and misleading marketing tactics were designed to make the company extra money at the expense of DC residents, and we can’t let them get away with it.”
In a consent order signed by the judge, Grubhub denied the allegations and wrongdoing. “Defendants are entering into this consent order solely to settle this matter,” the order states.
Grubhub spokeswoman Liza Dee said Friday that a settlement of the lawsuit is in the best interest of the business. “Grubhub is committed to supporting all restaurants and diners and has taken many steps to ensure price transparency,” Dee said in her email.
The order requires that Grubhub, when presenting search results, disclose that additional charges may apply at checkout, list the charges as a separate item, and make the charges higher than those available at restaurants. Grubhub is required to take steps such as stopping the practice of charging menu prices that are too high. High price.
Under a consent order, people Users with active Grubhub accounts will receive a refundable credit and if not used within 90 days Grubhub will be required to send a check for the amount. Account holders are divided into three groups based on their order history, including order frequency. Members of the first group will receive at least $4.50 each, members of the second group will receive at least $7 each, and members of the third group will receive at least $10 each.
In a post on its website updated Friday, Nov. 21, Grubhub announced that it had reached an agreement with Racine and Pennsylvania Attorney General Josh Shapiro (recently elected governor by the Democratic Party). . Thousands of restaurant partners. ”
“We continue to spend millions of dollars each year on marketing to generate orders for our partners, increase support, awareness and order volume, and are committed to evolving with the restaurant industry,” said Grubhub. the post said.
Last year, Racine and Shapiro also reached an agreement requiring Uber Eats to clearly disclose that food purchased through the app may be more expensive than the same item purchased at a restaurant.
Racine previously negotiated a $2.5 million settlement after suing DoorDash, accusing the company of using courier advice from consumers to cover labor costs.
Chicago also filed complaints against Grubhub and DoorDash in 2021, alleging “deceptive and unfair business practices that harm restaurants and mislead consumers.” The case cites many of the same practices cited in Racine’s complaint, including misleading fees and deceptive campaigns to “save restaurants” during the pandemic.
In 2020, two class-action lawsuits were filed over the way Grubhub treats “unaffiliated” restaurants. Facilities that do not have a contract to list on the delivery service’s app or website.
One class action lawsuit filed in federal court in Colorado alleges that Grubhub lists non-partner restaurants on its platform, does not accept online orders and redirects diners to partner restaurants. A second class action lawsuit, filed in federal court in Illinois, alleges that Grubhub added more than 150,000 restaurants to its platform without permission, leading to customer confusion and problematic orders.
Those lawsuits are ongoing.
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