Grubhub has been hit with a lawsuit after allegedly adding more than 150,000 establishments to their platform without informing the owners, CBS News reports.
A lawsuit filed in Chicago claims that Grubhub added "non-partnered restaurants" to its platform to please shareholders and boost revenue to beat out competitors like Uber Eats and DoorDash.
"Grubhub's decision to add unaffiliated restaurants to its platform may have reaped immediate dividends for Grubhub, but those gains came at the expense of restaurants who had good reasons for choosing not to partner with Grubhub," the lawsuit states. "By including those restaurants on its platform anyway, Grubhub is misleading consumers, who reasonably believe the restaurants have partnered with Grubhub and will be working cooperatively with Grubhub to provide them with accurate, reliable and timely service."
Grubhub currently lists 300,000 restaurants on its platform, but only 245,000 are described as partnered establishments. The company started the process of adding to its non-partnered restaurants last October. CEO Matt Maloney reportedly said in an earnings call that the company has "tens of thousands of non-partnered restaurant" on the platform and it's "already made the call to scale this out, we're just announcing it right now."
The lawsuit claims that several restaurants have asked to be taken off the site, but Grubhub refuses. As a result, they are stating that Grubhub is violating federal false advertising and trademark infringement rules because it's profiting by using local restaurants' name, logo, and menu.
Grubhub saw a 41% increase in the second quarter compared to the same period last year as many people are ordering in due to the pandemic. Despite the increase, they are still behind Uber Eats and the top food delivery service, DoorDash. Grubhub has yet to comment on the pending lawsuit.
