Grubhub customers in Washington D.C are set to get $2.7million in refunds

Grubhub is set to issue $2.7 million in refunds to customers in Washington D.C. after the company charged hidden fees to increase profit.

DC Attorney General Karl Racine filed the lawsuit against the food delivery company earlier this year alleging they were offering false services such as ‘free delivery’ for Grub Hub Plus subscribers.

The lawsuit claimed users were still required to pay a service and delivery fee. It was also argued that the company misled customers by listing restaurant items at a higher price than they are on the original menu.

‘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 wrote in a statement.

Grubhub is also required to pay $800,000 to settle the lawsuit with DC. Totaling a $3.5 million loss.

DC Attorney General Karl Racine filed the lawsuit against the food delivery company earlier this year alleging they were offering false services such as ‘free delivery’

The food delivery company must now pay affected customers between January 1, 2016, to December 31, 2022, through credit in their Grubhub accounts.

Customers will be paid in three waves and can expect to receive credit between $4.50 and $10 in their accounts.

The amount must be redeemed within 90 days, or the company will be required to send customers a check, according to the news outlet.

‘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,’ Racine wrote.

Grubhub will also be required to inform customers of any additional fees.

The lawsuit claimed Grubhub denied any wrongdoings, but the company agreed to pay the settlement.

‘Settling this lawsuit is in the best interest of our business and the matter is now resolved,’ Liza Dee, Grubhub spokesperson, told The Verge.

‘Grubhub is committed to supporting all restaurants and diners, and is taking a number of steps to ensure price transparency.’

The company also released a statement on its website promoting its new transparency guidelines and the conditions of the settlement.

Grubhub has since issued a statement pledging transparency to customers

Grubhub was also previously accused of ‘cybersquatting’ in 2019 by setting up 30,000 fake websites disguised as linked restaurant homepages on its app to jack up prices and charge crippling commission fees.

The company reportedly purchased 34,000 URLs since 2010 with names similar to restaurants’ existing pages and created copycat sites that even use the businesses’ logos, according to The New York Post.

While the fake sites usually have the same menu as the real ones, the prices were higher. 

At the time, Grubhub denied any wrongdoing.