After turning down partnership with Grubhub and then finding their restaurants listed on the company’s site regardless, two restaurant owners have filed a $5 million lawsuit against the delivery service. The owners say being listed on the food delivery site has resulted in order confusion and has harmed their reputations. The lawsuit claims similar false listings have occurred to 150,000 other restaurants.
North Carolina’s Antonia’s and the Bay Area’s The Farmer’s Wife are spearheading the class action complaint. The lawsuit says Grubhub’s actions have hurt both restaurants’ reputation and trust with customers.
“It’s led to very bad exchanges with customers who are, in the end, blaming me because I’m listed on Grubhub,” said The Farmer’s Wife cook Kendra Kooling in an interview with the San Francisco Chronicle.
As Motherboard has previously reported, Grubhub (and Yelp, and several other delivery services) have signed up restaurants for their websites without their knowledge or participation. A spokesperson said in an interview with Eater, “the non-partnered model is no doubt a bad experience for diners, drivers and restaurants,” claiming they would, “without hesitation remove any restaurant who reaches out to us and doesn’t want to be listed on our marketplace.” But this forces responsibility on the restaurant to check to see if they've been added to the site in the first place. Grubhub declined to comment for this story.
The Chicago-based company is also creating fake landing pages, the complaint says.
The fake web pages, with a restaurant's logo, will appear when a customer searches for delivery options. The landing page will say the unpartnered restaurant is closed for delivery (when many times they are open), and then suggest a consumer is redirected to a Grubhub partner restaurant, according to the complaint. An attorney representing the restaurants told Motherboard this violates the Lanham Act, which states no one may use a trademarked logo to cause consumer confusion.
“The Lanham Act offers a variety of remedies that could help repair the damage Grubhub has done to local restaurants throughout the country,” said Geoffrey Munroe, a lawyer from the firm, Gibbs Law Group, representing the plaintiffs, in an email to Motherboard. “For example, Grubhub can be required to surrender all the money it made by including restaurants on its platform without consent. That money rightfully belongs to restaurants, whose strong local reputations were responsible for quickly reversing Grubhub’s flagging fortunes and increasing its user base, revenue, and stock price. We also want to force them to stop this practice, which is a disservice to everyone but Grubhub.”
Not only are restaurant owners frustrated, consumers are confused, the lawsuit claims. "Because Grubhub is offering food services from the restaurant without consent, there is a much greater likelihood that the order will take longer to fill, will be filled incorrectly, will be delivered cold, or will eventually be cancelled altogether,” the complaint states.
Called Place & Pay, or “purple orders,” a driver can see when a customer has purchased food with an unpartnered restaurant—as the shop’s logo on their app is highlighted in purple. Consumer facing apps do not have this color coding. Purple orders require a driver place and then pay for a consumer’s order themselves.
“The entire process is sketchy, I feel dirty every time I do it. I don't like it at all but on a slow day I don't really have a whole lot of options available to me so I just suck it up,” says a supposed delivery driver in the lawsuit.
Both Antonia’s and The Farmer’s Wife offer their own takeout options. They say that because their menus are constantly changing, they often cannot fulfill Grubhub orders (which cannot update menus in real time. The class action says this hurts the restaurants’ reputation and spurs negative reviews.