In the bustling city of Washington D.C., GrubHub, the famous food delivery service, found itself in hot water. In 2022, D.C. Attorney General Karl Racine filed a lawsuit against GrubHub, accusing them of dishonest advertising and sneaky marketing practices. They claimed to offer “free delivery” for Grub Hub Plus subscribers, but in reality, they charged hidden fees. GrubHub’s tactics led customers to order more frequently, unaware of the true cost.
Caught in the act, GrubHub faced the consequences of its actions. They were accused of making customers pay service and delivery fees despite claiming free delivery. Moreover, they inflated menu prices, deviating from what the restaurants had listed.
Racine, clearly disappointed in GrubHub, said, “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.”
The lawsuit resulted in GrubHub having to pay a hefty sum. They agreed to give back $3.5 million, which included $2.7 million in customer refunds and another $800,000 for the District of Columbia, as compensation for breaking the law and charging hidden fees.
Now, the residents of Washington, D.C. who ordered from GrubHub between January 1, 2016, and December 31, 2022, found themselves receiving unexpected refund credits in their GrubHub accounts. As long as they lived near the U.S. Capitol, they were eligible for these refunds. Ranging between $4.50 and $10, the refunds were given out in three installments and had to be used within 90 days. If customers failed to use the refund in time, GrubHub promised to send them a check instead.
Racine was determined not to let GrubHub get away with taking advantage of D.C. residents. Although GrubHub never admitted any wrongdoing, they agreed to the settlement. GrubHub spokesperson Liza Dee told The Verge, “Settling this lawsuit is in the best interest of our business, and the matter is now resolved. Grubhub is committed to supporting all restaurants and diners and is taking a number of steps to ensure price transparency.”
This wasn’t the first time GrubHub faced controversy with customers. In 2019, they were accused of creating 30,000 fake websites linked to restaurant homepages, which allowed them to raise prices and charge extra fees. They bought 34,000 URLs that closely resembled restaurant websites and even used their logos without permission.
The outcome of this lawsuit serves as a cautionary tale, highlighting the importance of honesty and ethical business practices. Though the refunds might not make up for the frustration experienced by affected customers, it was a significant step toward holding companies accountable for their actions.
It’s a reminder that customers should keep a watchful eye on businesses and demand transparency, while businesses must work hard to maintain the trust of the people they serve.
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