Grubhub has been ordered to pay $3.5 million to settle a District of Columbia lawsuit that claims the company misled customers by adding hidden fees to their orders. According to a press release, Grubhub must pay $800,000 to DC as a civil penalty, while the remaining $2.7 million will be refunded to affected customers.
In March, DC Attorney General Karl Racine filed a lawsuit against Grubhub, accusing the company of falsely promising customers free online ordering as well as unlimited free delivery for those who subscribe to Grubhub Plus.
The lawsuit was filed in March by DC Attorney General Karl Racine, who accused Grubhub of falsely offering free online ordering and unlimited free delivery to those who subscribe to Grubhub Plus.
The lawsuit claims this practice is deceptive, as Grubhub still charges a service fee for non-pickup orders and also charges delivery and service fees for standard orders.
Grubhub has also previously been accused of listing restaurants on its platform without having their permissions and creating microsites that resemble real restaurant sites to route orders through Grubhub.
At the time of the filing of the lawsuit, Grubhub denied the claims, saying that many of the practices in question had already been discontinued.
“Resolving this lawsuit is in the best interest of our business and the matter is now resolved. Grubhub is committed to supporting all restaurants and diners, and is taking a number of steps to ensure pricing transparency,” Grubhub spokeswoman Liza Dee said in a statement to The Verge.
Under the settlement, Grubhub will be required to place a refundable credit on the accounts of affected customers, including anyone who has paid a small order or service fee on an order placed through the Grubhub Platform at a restaurant located in DC between January 1, 2016 and December 31, 2022.
Affected customers will be divided into three groups based on how often they used the platform, with those in the first group receiving at least $4.50, the next group receiving at least $7, and the last group receiving at least $10. If the account owner does not redeem the credit within 90 days of receiving the credit, Grubhub will need to send a check for the amount due.
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