Washington D.C. Attorney General Karl Racine announced today that his office filed a lawsuit against Grubhub for “misleading District residents and taking advantage of local restaurants to boost its own profits.”
The lawsuit alleges that Grubhub violated D.C.’s Consumer Protection Procedures Act (CPPA) in eight different ways, which mostly center on false advertising. The filing references misleading prices (prices are often higher in-app than at the restaurant) and false claims that deliveries via Grubhub+ were free when they still contained a service charge.
Some of the complaints point to practices that the platform has since discontinued, like Grubhub’s early-pandemic-era “Supper for Support” promotion. Launched in late March 2020, Grubhub offered restaurants the opportunity to offer a $10 coupon on orders over $30, but the restaurant had to foot the bill for that free food. On the consumer end, Grubhub encouraged customers to “save while supporting the restaurants [they] love,” even though their promotion actually put more strain on restaurants by pressuring them to lower profit margins (if one neighborhood taco shop enrolled in the promotion, and the other didn’t, where do you think consumers would direct their business?).
“The company deceived users with a promotion that claimed to support local restaurants during the heart of the pandemic. But in reality, this program cut into struggling restaurants’ profit margins while padding Grubhub’s bottom line,” Attorney...
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