February 22, 2024
Grubhub’s business is “suffused with deception,” Los Angeles County said in a lawsuit filed Wednesday, claiming the food delivery service has long misled customers about prices and driver benefits and imposed “abusive” policies on restaurants.
The county accused Grubhub of false and deceptive advertising, misrepresentation and unfair business practices that harm consumers, delivery drivers and restaurants, according to the complaint filed in Los Angeles County Superior Court.
The county pointed to search results that consumers see when they browse the app. Those results are based in part on undisclosed restaurant advertising payments rather than neutral factors, such as how close a restaurant is, the county said. Consumers are also misled about the prices of their orders and the benefits delivery drivers receive, it claimed.
For instance, Grubhub says consumers can place delivery orders online free, but then it charges them fees on those orders at checkout, Los Angeles County said. The company also misrepresents its “driver benefits fee,” deceptively implying that the fee provides healthcare benefits to drivers and that drivers no longer need to be tipped, according to the suit.
The suit also says Grubhub subjects restaurants to “an undisclosed and abusive policy” under which Grubhub resolves customer complaints by issuing refunds – using restaurant money – without first getting the restaurant’s permission, the county said.
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California is represented by Jon Scott Kuhn, Andrea Ross, Cesar J. Del Peral and Ida Anbarian of the Los Angeles County Office of County Counsel and Brian E. Bowcut and Peter Ketcham-Colwill of Cohen Milstein Sellers & Toll PLLC.
Read Grubhub’s Business Is ‘Suffused With Deception,’ LA Says.