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District of Columbia sues Grubhub, alleging deceptive practices

The city argues that the delivery provider is misleading customers by hiding fees and obscuring its relationships with certain restaurants. The company said the suit is “frivolous.”
Grubhub app on phone screen
Photograph: Shutterstock

The District of Columbia is suing Grubhub, accusing the third-party delivery provider of deceiving customers with hidden fees and other practices.

In a complaint dated March 17, the city lays out a list of eight Grubhub policies that it says misled consumers and violated D.C.’s consumer protection law.

The allegations are nearly identical to those brought by the city of Chicago in a lawsuit filed against Grubhub in August.

D.C. is accusing the company of:

  • Listing restaurants on its website and app without their permission and without properly disclosing the situation to consumers.
  • Listing menu prices that are higher than those offered at the restaurant without properly disclosing the difference to consumers.
  • Telling consumers that they would be charged a delivery fee while hiding additional charges like service fees and small-order fees.
  • Telling consumers that they can order online for free, even though that offer applies only to pickup orders.
  • Telling consumers that the Grubhub+ membership program includes unlimited free delivery even though they have to pay a service fee on every order.
  • Assigning Grubhub-generated phone numbers to some restaurants and then charging them for orders placed using those numbers. (Gruhbub discontinued this system last year.)
  • Creating websites meant to look like a restaurant’s site without properly disclosing to customers that Grubhub is operating the website.
  • Deceiving consumers with a Supper for Support promotion that offered $10 off orders of $30 or more in the name of helping struggling restaurants. The complaint alleges that restaurants had to cover the $10 discount while also paying commissions on the full price of the order.
     

In a statement, Grubhub referred to the lawsuit as “frivolous,” adding that it has discontinued many of the practices outlined in the complaint.

“We will aggressively defend our business in court and look forward to continuing to serve D.C. restaurants and diners,” the company said.

It is the latest clash between third-party delivery companies and big cities. Grubhub is currently involved in two lawsuits of its own against San Francisco and New York over those cities’ permanent delivery fee caps. And it is facing the aforementioned lawsuit in its hometown of Chicago.

The wave of litigation comes as delivery companies have seen business boom during the pandemic, even as some restaurants have pushed back against their high commissions and other practices.

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