The District of Columbia is suing food delivery company Grubhub in a lawsuit filed Monday, in which it accuses the company of “deceptive marketing practices” such as excessive fees, outdated restaurant prices and the false advertising.
DC Attorney General Karl Racine said in the complaint that Grubhub often misrepresents what is offered on the app and website.
To start, he said, Grubhub lists more than 1,000 “partner restaurants” available for delivery in DC that had no contract with Grubhub, and added the restaurants to the platform’s directory without owners’ consent.
“This deceptive conduct had a significant impact on consumers in the District of Columbia, as menu offerings, prices, and hours from non-partner restaurants were more likely to be outdated or incorrect, and there was a greater likelihood that orders from these restaurants would take longer to fill, be filled incorrectly, be delivered cold, or ultimately be canceled altogether,” the complaint states.
In response, Grubhub officials dismissed the charges, adding that they were in accordance with district laws. The Chicago-based company said some of the practices cited by the lawsuit have been discontinued.
“We will aggressively defend our business in court and look forward to continuing to serve DC’s restaurants and restaurants,” the company said in a statement reported by The Associated Press.
In its complaint, DC officials alleged that local restaurant prices on the app and website were also generally higher than in-store prices, although Grubhub said they were the same. Consumers also have to pay various fees, such as delivery fees, service fees, and order fees for purchases under $10, which further increase prices.
Other charges would also apply at checkout despite advertising that customers would only have to pay a delivery charge, according to the lawsuit.
“Also, until recently, even when consumers navigated to the payment page, Grubhub further obscured these fees by combining them in the same line item as ‘taxes,'” it says.
He continued: “This practice constitutes a digital ‘dark model’, that is, a design feature that tricks, coerces or manipulates consumers into making choices that are not what they had. intend to do or that is not in their best interest.”
In April and May 202o, Grubhub ran a “Supper for Support” promotion, in which it offered discounts to customers to support restaurants at the start of the COVID-19 pandemic. However, the lawsuit alleges that the costs of those discounts were passed on to those restaurants.
Grubhub told The Verge that he plans to fight the lawsuit.
“Over the past year, we have sought to engage in constructive dialogue with the DC Attorney General’s Office to help them understand our business and see if there are areas for improvement,” the door said. -word by Grubhub, Katie Norris.
The DC Attorney General’s Office encourages Grubhub to end the listed practices, as well as pay civil penalties, attorneys’ fees, and costs for each violation of DC’s Consumer Protection Procedures Act.
Last year, Chicago officials sued DoorDash and Grubhub over their policies. The San Francisco District Attorney accused the delivery companies of violating California law by classifying the drivers as contractors. And Washington, DC, reached a settlement with DoorDash in 2019 after it alleged the company misled customers about the amount of tips drivers received.
The companies, however, retaliated with their own lawsuits. DoorDash, Grubhub and Uber Eats sued New York for its price caps last September.