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L.A. County Accuses Grubhub of ‘Bait-and-Switch’ With Last-Minute Fees

Los Angeles Times

February 22, 2024

L.A. County is suing Grubhub, alleging that the company violated state laws that prohibit false advertising.

The price of the turkey on rye half-sandwich from Langer’s Delicatessen-Restaurant in Los Angeles, purchased through the delivery app Grubhub, starts around $17.

But at checkout, the costs mount. With additional fees and sales tax, the cost of a sandwich delivery can hit over $26.00. Plus tip.

L.A. County says it amounts to an illegal “bait-and-switch.”

In a lawsuit filed Wednesday against Grubhub, county lawyers argue the food delivery company has repeatedly flouted a state law barring false advertising by promoting meals at a cheaper price than what customers see at the checkout page.

“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 says. “Multiple aspects of Grubhub’s business — and every transaction for food delivery — are suffused with deception.”

A Grubhub spokesperson said in a statement the company plans to “aggressively defend” itself in court.

“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,” a company spokesperson wrote. “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.”

The lawsuit refers to a Grubhub webpage with a banner that says customers can “order online for free” at Los Angeles restaurants near them. In reality, the lawsuit says, they cannot.

Grubhub said it is working on removing the language “from all existing materials.”

“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 Supervisor Lindsey Horvath, the board chair, in a statement.

It’s the latest government action aimed at preventing companies from hitting consumers with surprise charges. A new state law goes into effect this summer prohibiting last-minute “junk fees” across a long list of businesses, including delivery apps. Atty. Gen. Rob Bonta, who co-sponsored the measure, has promised “the price Californians see will be the price they pay.”

The attorney general’s office has said that once the law goes into effect, delivery apps cannot tack on miscellaneous fees at the end of the transaction.

The county’s lawsuit argues the status quo hurts not only Grubhub’s customers, but also the drivers and restaurants who serve them.

Read L.A. County Accuses Grubhub of ‘Bait-and-Switch’ With Last-Minute Fees.