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Lawsuits & Litigation

Los Angeles Sues Grubhub for “False Advertising” and “Unfair Business Practices”

— February 27, 2024

Attorneys for Los Angeles County claim that Grubhub uses “bait-and-switch” tactics to trick customers into thinking they might get a good deal, only to hit with an assortment of fees and charges at checkout.

Los Angeles County has filed a lawsuit against food-delivery platform Grubhub, claiming that it engages in false advertising and other unfair business practices.

According to The L.A. Times, attorneys for the county filed the lawsuit last Wednesday. In its complaint, Los Angeles suggests that Grubhub’s practice of advertising items at a set price before adding fees, tax, and proposed tips at checkout is tantamount to an illegal “bait-and-switch.”

“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.”

California, the county notes, has laws that prohibit false advertising by promoting meals and other items at a significantly lower price than what consumers see when they finally reach the checkout page. In many cases, Grubhub’s fees end up costing more than the meal the customer had originally intended to purchase.

Downtown Los Angeles. Image via Wikimedia Commons/user:salewskia. (CCA-BY-4.0).

“Grubhub has built this vast marketplace through practices that mislead consumers and restaurants and put the squeeze on the company’s delivery drivers,” the lawsuit alleges. “Multiple aspects of Grubhub’s business—and every transaction for food delivery—are suffused with deception.”

The complaint also states that Grubhub’s in-application marketing tactics are problematic.

In its “suggested” restaurants recommendations, for instance, Grubhub displays businesses that pay for preferential advertising spaces—not businesses that are relevant to a customer’s search, or otherwise matched to a customer’s habits and preferences.

“We think we have a very strong case here and we hope that [Grubhub] 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,” said Assistant County Counsel Scott Kuhn.

Grubhub has since responded to some of the allegations, saying that it has discontinued its alleged “bait-and-switch” tactics. The company also flatly denied “suggesting” only restaurants that pay for preferential treatment.

“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,” Grubhub said in a statement. “We will aggressively defend our business in court and look forward to continuing to serve [Los Angeles] restaurants, diners and drivers.”


Grubhub sued by LA County for false advertising and unfair business practices

L.A. County accuses Grubhub of ‘bait-and-switch’ with last-minute fees

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