[ad_1]
The European food delivery company may finalize a deal with Grubhub, weeks after it was reported that Uber was in talks with Grubhub about a possible merger. (Shutterstock via CNN)
Los Angeles County filed a lawsuit Wednesday against food delivery service Grubhub over alleged deceptive business practices, officials said.
The lawsuit accuses the food delivery giant of several actions that the county deemed to be “taking advantage” of consumers, drivers and restaurants.
“This lawsuit sends a clear message that Los Angeles County will not tolerate companies that defraud consumers, patronize restaurants, and exploit drivers who work hard to provide valuable services.”Los Angeles County said Committee Chair Lindsay P. Horvath. news release. “Our County Attorney’s Office and Department of Consumer and Business Affairs fight these unfair practices on behalf of consumers and businesses.”
In a statement provided to KTLA 5 by a company spokesperson, Grubhub said:
“We are working diligently to support Los Angeles restaurants, diners, and drivers and are continually reviewing and enhancing our operations to better serve them and meet their expectations. , we have sought to engage in constructive dialogue with the Los Angeles County Attorney’s Office to explain our business and identify areas for improvement. Our activities always comply with applicable law, and in no event will we However, we are disappointed that they moved forward with this lawsuit, as many of the allegations are false or have been discontinued. We look forward to continuing to serve our customers, diners, and drivers.”
The 51-page lawsuit includes several Grubhub ads that clearly tell consumers they can order food online for “free” from Los Angeles-area restaurants before charging hidden fees at checkout. There is. Grubhub told KTLA that these practices have been “eliminated” and that all fees are now fully disclosed prior to purchase.
Other accusations have also been made against the mobile application’s restaurant listings. Rather than categorizing vendors by “relevance,” the list is sorted based in part on the advertising dollars vendors paid for their spots, according to the complaint.
Grubhub disputed this claim, saying its search algorithm takes into account “location, restaurant category, and a consumer’s past ordering behavior.”
The complaint alleges that the introduction of a “driver benefit fee” in 2020 could reduce tips for workers based on misleading representations. The fee, which currently ranges from $1 to $3, would go toward health care subsidies introduced in California through Proposition 22.
However, according to the County of Los Angeles, most drivers are not eligible for these benefits, leading to the belief that “consumers are no longer required to tip drivers because they are ‘not dependent on tips.'” That’s what it means. According to the complaint, text displayed on the app’s checkout screen told consumers that they could “leave an optional tip in addition to driver benefits.”
“Grubhub is clearly providing drivers with information about Proposition 22 through ongoing communications and a dedicated publicly available resource page,” the spokesperson said. “While we do not believe this language is misleading, in the future Grubhub will make it even clearer for drivers how to benefit from Proposition 22 by displaying it to customers on their Checkout page. We plan to update the wording.”
Restaurants are also harmed by this business practice, according to the complaint, which says Grubhub has complete discretion over when and how to provide customers with full refunds for their meals. This means that if a refund is requested due to a delivery problem, the company can issue the refund on the restaurant’s behalf and the restaurant can cover the bill.
Grubhub said its refund policy changed last year to make it easier for restaurants to dispute charges.
The lawsuit asks that Grubhub be permanently prohibited from engaging in the listed conduct and that the company pay fines and restitution.
[ad_2]
Source link
