Last week, Los Angeles County filed a lawsuit against the popular food delivery app Grubhub, accusing the company of misleading customers with hidden fees and false advertising practices. The lawsuit alleges that Grubhub has repeatedly violated California state law by promoting meals at a lower price than what customers ultimately pay at checkout. This practice, known as “bait-and-switch,” is illegal and deceptive to consumers.

One example cited in the lawsuit is the price of a turkey on rye half-sandwich from Langer’s Delicatessen-Restaurant in Los Angeles. While the advertised price on Grubhub may start at around $17, additional fees and sales tax can push the total cost of delivery to over $26. The lawsuit argues that this discrepancy between advertised prices and actual costs is unfair to consumers and constitutes false advertising.

In response to the lawsuit, a spokesperson for Grubhub stated that the company plans to defend itself vigorously in court. The company emphasized that it has always complied with applicable laws and disputed many of the allegations made in the lawsuit. However, the lawsuit raises significant concerns about Grubhub’s business practices and their impact on consumers, restaurants, and delivery drivers.

The lawsuit also highlights the issue of “junk fees” and surprise charges that have become increasingly common in the delivery app industry. A new state law set to take effect this summer aims to prohibit last-minute fees across various businesses, including delivery apps. The law is designed to ensure that the price consumers see upfront is the price they ultimately pay, without any unexpected additional charges.

Furthermore, the lawsuit alleges that Grubhub’s practices harm not only its customers but also the restaurants and drivers who rely on the platform. Restaurants signing up for Grubhub were reportedly not adequately warned about the potential need to refund money to dissatisfied customers, even if the restaurant did not believe an error had occurred. In addition, the lawsuit claims that Grubhub gives preferential treatment to restaurants that pay higher marketing fees, potentially misleading consumers about the search results they see on the app.

Grubhub’s treatment of its delivery drivers also comes under scrutiny in the lawsuit. The company faced backlash in 2020 for introducing a new charge, called the driver benefits fee, which led to a decrease in driver earnings. The lawsuit alleges that Grubhub’s explanation of this fee may discourage customers from tipping, as it misrepresents drivers’ actual earnings and reliance on tips for income.

It’s important to note that this is not the first time Grubhub has faced legal action over its business practices. In 2022, the company settled a similar lawsuit with Washington, D.C., for $3.5 million after the district’s attorney general accused Grubhub of manipulating customers with hidden fees. A significant portion of the settlement funds went back to affected customers, reflecting the impact of Grubhub’s practices on consumers.

Overall, the lawsuit filed by Los Angeles County sheds light on the deceptive practices and unfair treatment that have raised concerns about Grubhub’s operations. It underscores the need for stronger consumer protections and transparency in the food delivery industry, especially as more consumers rely on these platforms for meal orders. As the legal proceedings unfold, it’s essential for regulators, businesses, and consumers to consider the implications of these allegations and work towards a fair and ethical food delivery marketplace for all stakeholders.