Grubhub Sued By LA County For Alleged 'Bait-And-Switch' With Fees

Have you ever hopped on Grubhub for a $15 bowl of pho, only to find the total cost at checkout is suddenly closer to $30? You aren't alone — and now, the Los Angeles County Counsel's office is taking a stand and holding Grubhub accountable. L.A. County has sued Grubhub on behalf of the people of the State of California for running a "bait-and-switch" that violated a law against false advertising. Per the lawsuit, a Grubhub webpage displayed a banner for free online ordering from Los Angeles restaurants. However, seeing a huge pile of fees at the end might suggest otherwise. As the Office of the County Counsel notes, "In some cases, the costs of the fees exceed the cost of the food item ordered."

"Multiple aspects of Grubhub's business — and every transaction for food delivery — are suffused with deception," says the lawsuit, via the Los Angeles Times. A Grubhub spokesperson told the news outlet that the company is "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 also stated that it's doing away with the allegedly misleading language. In recent years, the company has faced and ultimately lost similar lawsuits in Chicago (2021, paying $10 million in an out-of-court settlement) and Washington D.C. (2022, paying $3.5 million in settlement fees and $800,000 in civil penalties).

The lawsuit argues that Grubhub's practices cause harm to customers, restaurants, and drivers. Part of the contention is that these infamous surprise fees are tacked on without the consultation or consent of restaurants, thereby misrepresenting them. Grubhub also accepts payments for more prominent list placement of food establishments, purportedly giving customers the impression that some search results are more relevant than they actually are.

Perhaps the worst accusation is that Grubhub misrepresents how much of those aggressive added charges are going to the drivers as part of the "Driver Benefits Fee." The complaint states that Grubhub deceptively conveyed that workers are taken care of and "don't have to rely on tips." The fact that these accusations are being leveled in California is worth highlighting. The state has been sticking up for its low-wage workers in a big way lately. Last September, Governor Gavin Newsom signed an act raising the minimum wage for California fast food workers to $20; the raise will take effect on April 1. New York enacted the first mandatory minimum wage rule for third-party app-based delivery drivers last year; by 2025, it could go up to $20 per hour. What this lawsuit will mean for workers and customers remains to be seen.