They Really Are Scum

Why am I not surprised that Grubhub will spare no effort to f%$# the restaurants it serves like a drunk sorority girl.  This sort of behavior is kind of classic, "New Economy."

So now the City of Chicago is suing the delivery service for lying about its promotional deals to its customers:

In late 2021, nearly six months after officials first filed a lawsuit against third-party delivery giant Grubhub, the city of Chicago filed an amended complaint that includes new allegations that the locally based company “used deceptive marketing and pricing practices designed to mislead consumers and unfairly harm the same local restaurants Grubhub claims to support,” officials announced Tuesday morning.

The city filed the amended complaint on December 27, 2021 in Cook County circuit court, but officials issued a news release more than a month later as “some indicated they weren’t able to find the amended complaint,” according to a rep. Its contents are the result of an ongoing investigation by the city and — as in the original from August — contains details from Chicago restaurants who claim the company uses bait-and-switch tactics to dupe customers and undermine restaurants navigating extreme financial challenges during the ongoing COVID-19 pandemic. 

Attorneys for the city listed a multitude of allegations in the complaint, including charging restaurants for Grubhub-issued customer refunds, advertising free online ordering while still charging delivery fees, and manipulating restaurant search tools on its website based on “undisclosed marketing fees.” It also addresses the company’s pandemic-era “Supper for Support” promotion, which the city claims took advantage of public goodwill toward struggling businesses and misrepresented the true cost of the program to restaurants:

Grubhub’s “Supper for Support” promotion, which offered consumers $10 off orders of $30 or more, entreated consumers to “help save the restaurants we love” by placing orders through the Grubhub Platform. Grubhub misrepresented Supper for Support as a win-win opportunity for consumers and restaurants. In reality, Grubhub required that participating restaurants cover the steep cost of the discount and charged them Grubhub’s full commission on the pre-discount order price.

………

The city’s first lawsuit filed in August 2021, alongside a separate suit against delivery brand DoorDash, was the first suit in the country to cover a wide swath of issues in one filing. Other municipalities have homed in on a single issue, including a suit filed in July by Massachusetts’s attorney general that accuses Grubhub of violating a fee cap. Chicago issued its own fee cap in November 2020, limiting third-party couriers to a 15 percent fee for delivery services, which it claims Grubhub is also breaching.

If we had meaningful enforcement of fraud statutes, these tech bros would frog-marched out of their offices in handcuffs.