The city of Chicago recently amended a lawsuit against Grubhub over allegations of deceitful business practices.
Grubhub is at the center of a lawsuit that was recently amended earlier this year that alleges the delivery company “used deceptive marketing and pricing practices designed to mislead consumers and unfairly harm the same local restaurants Grubhub claims to support.” The suit was amended by the city of Chicago and filed in Cook County circuit court.
Included in the suit are allegations from Chicago restaurants that argue the company “uses bait-and-switch tactics to dupe customers and undermine restaurants navigating extreme financial challenges during the ongoing COVID-19 pandemic.” Additionally, the suit accuses the company of “charging restaurants for Grubhub-issued customer refunds, advertising free online ordering while still charging delivery fees, and manipulating restaurant search tools on its website based on undisclosed marketing fees.”
On top of that, the suit takes issue with Grubhub’s ‘Supper for Support’ promotion that rolled out as a result of the pandemic. According to the suit, the city claims the promotion “took advantage of public goodwill toward struggling businesses and misrepresented the true cost of the program to restaurants.” It states:
“Grubhub’s ‘Supper for Support’ promotion, which offered consumers $10 off orders of $30 or more, entreated consumers to “help save the restaurants we love” by placing orders through the Grubhub Platform. Grubhub misrepresented Supper for Support as a win-win opportunity for consumers and restaurants. In reality, Grubhub required that participating restaurants cover the steep cost of the discount and charged them Grubhub’s full commission on the pre-discount order price.”
So far, Grubhub has pushed back against the allegations, and in August, a company representative said that restaurants participating in the promotion “knew about the specifics of the program and were not misled.”
This isn’t the first time that Grubhub has come under fire in recent years. Over the last few years, many “restaurant owners in the city have raised concerns about the company’s business practices — chief among them, frustrations over unsolicited and unwanted online restaurant listings that imply a partnership with Grubhub that doesn’t actually exist.” For example, chef Beverly Kim went to the city council in May 2020 and said “she felt so violated by Grubhub’s unauthorized listing of her Michelin-starred restaurant Parachute that she posed as a customer and placed a delivery order to see what would happen.” She added that “when a Grubhub driver arrived, the Avondale restaurant — which doesn’t offer delivery — refused to fill the order.” When Kim reached out to Grubhub, still posing as a customer, the company allegedly blamed Parachute and told her the “problem stemmed from her own restaurant’s delivery system.”