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Tuesday, April 23, 2024

Justice Served: LA County Strikes Back at Grubhub’s False Advertising and Unfair Business Tactics

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Los Angeles County lawmakers are taking on food delivery giant Grubhub with a suit alleging false advertising and unfair business practices.

“This lawsuit sends a clear message: Los Angeles County will not tolerate businesses that deceive consumers, take advantage of restaurants, and exploit the drivers who work hard to provide a valued service,” said Los Angeles County Board Chair Lindsey P. Horvath. “Our County Counsel and Department of Consumer and Business Affairs are standing up for consumers and businesses by fighting these unfair practices.”

The lawsuit alleges that Grubhub deceptively advertises that customers can place delivery orders for free but then charges those customers with fees at check out. However, the company said it discontinued this practice.

Grubhub is also accused of bait-and-switch tactics, luring customers in with one lower price and then tacking on fees at checkout for things like service charges. The lawsuit alleges those fees are often more expensive than the food ordered. The company contends it is clear about its fees upfront.

Finally, the lawsuit claims the company will suggest restaurants to users not based on how well they fit the customer’s search but instead, they suggest restaurants that pay Grubhub the most money for placement. The company flat-out denied that allegation.

“We think that we have a very strong case here and we hope that the grub will come into compliance and will of course, make restitution to the consumers, restaurants and drivers that they’ve harmed throughout the years as well as pay civil penalties for the violations,” Assistant County Counsel Scott Kuhn said.

The lawsuit also accuses Grubhub of misleading users to believe that the driver benefits fee covers healthcare for the driver and that they no longer need to tip.

Grubhub said they are going to make the language on the fee clearer.

The suit also goes after the delivery service for making restaurants cover refunds without verifying whether the restaurant was responsible for the issue.

“We are disappointed they have moved forward with this lawsuit because our practices have always complied with applicable law, and in any event, many of the allegations are incorrect or have been discontinued,” the company said in a statement. “We will aggressively defend our business in court and look forward to continuing to serve LA restaurants, diners and drivers.

Drivers, customers, and restaurants in LA County, and throughout California, that feel they have been harmed by Grubhub’s alleged actions can reach out to the county’s Department of Consumer and Business Affairs.

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