LA County sues Grubhub, alleging unfair and deceptive business practices
LOS ANGELES (KABC) -- Los Angeles County filed a lawsuit Wednesday against Grubhub, accusing the online food ordering and delivery company of "deceptive advertising, misrepresentation and unfair business practices that financially harm consumers, delivery drivers and restaurants."
In a statement released Thursday, Board of Supervisors Chair Lindsey P. Horvath said the 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."
Grubhub, in a statement provided to ABC7, said it would vigorously defend its business.
"We've sought to engage in a constructive dialogue with the Los Angeles County Counsel's office to explain our business and identify any areas for improvement," the company's statement said. "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."
In an interview with ABC7, Assistant County Counsel Scott Kuhn said: "In terms of consumers, there is a bait and switch practice that Grubhub uses.
"They either advertise 'order online for free,' and then, as you go through the process of ordering there's all these hidden fees that come up at the end," Kuhn said. "Or they'll advertise a set delivery fee, but again as you go through the ordering process there's additional service fees, benefit fees, small order fees, etc."
The so-called "drip pricing" is common for customers.
Thousands of Uber and Lyft drivers stop work on Valentine's Day, demanding better pay
"Sometimes it does get a little tricky and confusing because it might show you one thing and then you gotta to tip the driver," said Grubhub customer Johny Dedyuk, who lives in Koreatown. "And then there's like, oh, we have that special delivery fee because it's raining, and all that stuff."
In the lawsuit, Grubhub is also being accused of misrepresenting restaurant search results to its customers.
"When they do that search, it's not just a true search of what are the restaurants nearby," Kuhn said. "Grubhub gives preference to restaurants that pay commission."
In addition, the county's lawsuit alleges Grubhub deceptively charges restaurants for consumer refunds -- without a due process to contest.
The company's driver's are also included, with the lawsuit claiming that few Grubhub workers receive health benefits despite the "benefit fees" tacked on to customers orders.
Daniel Wiggins, a former Grubhub driver, said he believes the company takes advantage of those who are struggling.
"I'd rather be treated fairly," Wiggins said, "but we have to do what we have to do."
