The ongoing controversy of some third-party delivery apps. adding restaurants without their permission took another when Grubhub settled a class-action lawsuit.
The lawsuit was filed in May of 2020 in the U.S. District Court for the District of Colorado by Freshcraft, a Denver bar and restaurant. In the lawsuit, the restaurant alleged that Grubhub was adding restaurants without their permission and stated that these restaurants were not offering delivery. The lawsuit said the practice made it difficult for the businesses to stay afloat during the pandemic and misrepresented restaurants’ delivery status.
Under the practice, when someone typed “Freshcraft delivery” into Google, Grubhub’s website came up. The lawsuit sought to have Grubhub discontinue the practice.
“This online advertisement falsely claims that Freshcraft is closed when it is not,” Freshcraft said. “In reality, Freshcraft is not only open, but also delivering its food to its customers using a different delivery platform. Freshcraft does not work with Grubhub and does not plan on contracting with their delivery or online ordering services.”
Under the terms of the settlement, Grubhub must display something like “This restaurant is not accepting orders through Grubhub” rather than saying the restaurant is not offering delivery.
For some time, Grubhub has been adding “non-partner” restaurants to its platform. In a 2020 letter to shareholders, the company said it had added 150,000 non-partnered restaurants. It said the restaurants were large and small restaurant brands and stated that these businesses “accounted for a low-single-digit percentage of our total orders.”