Grubhub to pay $3.5M settlement for deceptive practices, hidden fees

The company was sued in March for alleged violations of consumer protections.

December 30, 2022, 1:54 PM

Grubhub has been ordered to pay a $3.5 million settlement after the District of Columbia filed a lawsuit over the food delivery service's alleged deceptive practices.

On Friday, Washington, D.C., Attorney General Karl Racine announced the decision against Grubhub "for charging customers hidden fees and using deceptive marketing techniques to increase profits in violation of District consumer protection laws."

The District of Columbia sued Grubhub in March for alleged violations of the District's Consumer Protection and Procedures Act.

D.C.-area customers will collectively be awarded $2.7 million, which Racine said "will be paid back to affected customers."

"Those with active Grubhub accounts will receive a refundable credit and if the credit is not used within 90 days the money will be sent to customers in the form of a check," he said.

PHOTO: GrubHub delivery person on electric bike in the bicycle lane on Queens Boulevard in Queens, N.Y.
GrubHub delivery person on electric bike in the bicycle lane on Queens Boulevard in Queens, N.Y.
Lindsey Nicholson/UCG/Universal Images Group via Getty Images

Additionally, the meal delivery service platform will have to pay $800,000 in civil penalties to the District of Columbia.

"Grubhub used every trick in the book to manipulate customers into paying far more than they owed, and even worse, they did so at the height of a global pandemic when District residents were already struggling to make ends meet," Racine said in a statement.

He added, "Grubhub's hidden fees and misleading marketing tactics were designed to get the company an extra buck at the expense of DC residents -- but we're not letting them get away with it. No company, big or small, can take advantage of DC residents without consequence."

As part of the settlement, GrubHub will be required to more clearly note additional fees associated with your order.

"Settling this lawsuit is in the best interest of our business and the matter is now resolved," the company said in a statement. "Grubhub is committed to supporting all restaurants and diners, and is taking a number of steps to ensure price transparency."

ABC News' Beatrice Peterson contributed to this report.

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