Grubhub has been ordered to pay $3.5 million to settle the lawsuit filed against the company by the District of Columbia over "deceptive trade practices." Washington DC Attorney General Karl Racine has announced that his office has reached an agreement with the food delivery service "for charging customers hidden fees and using deceptive marketing techniques." If you'll recall, his office sued the company earlier this year, accusing it of charging hidden fees and misrepresenting Grubhub+ subscription's offer of "unlimited free delivery," since customers still have to pay a service fee.
The DC Attorney General's office also accused the company of listing 1,000 restaurants in the area without their permission by using numbers that route to Grubhub workers or creating websites without the eateries' consent. A previous TechCrunch report said the company had already ended those practices. Racine also said at the time that Grubhub ran a promotion called "Supper for Support" at the beginning of the pandemic and then "stuck restaurants with the bill" that cut into their profit margins.
Grubhub called the lawsuit frivolous at the time of its filing and said that the company was "disappointed [the AG's office has] moved forward with [it] because [the service's] practices have always complied with DC law, and in any event, many of the practices at issue have been discontinued."
Under the terms of the settlement, Grubhub will pay affected customers in the DC area a total of $2.7 million. Their cut will be credited to their accounts, and it will be sent to them as a check if it remains unused within 90 days. In addition, the company has to pay $800,000 in civil penalties to the District of Columbia and has to clearly mark additional fees people have to pay with their order going forward.
My office reached a $3.5 million settlement with Grubhub for charging customers hidden fees and using deceptive marketing techniques.— AG Karl A. Racine (@AGKarlRacine) December 30, 2022
As a result, $2.7 million will be returned to the consumers who were impacted, and it will have to shape up and disclose every fee separately.