Massachusetts Sues Grubhub Over Fees Charged During Pandemic

The suit seeks refunds for restaurants the attorney general's office says were charged illegally high fees

Andrew Harrer | Bloomberg | Getty Images

Online food delivery platform Grubhub charged some Massachusetts restaurants illegally high fees during the coronavirus pandemic, the state attorney general’s office alleged in a lawsuit filed Thursday.

The suit, filed in Suffolk Superior Court, seeks refunds for those restaurants as well as civil penalties, the office said in a statement.

According to the suit, Grubhub violated legislation that prohibited third-party delivery service platforms from charging fees to restaurants that exceed 15% of an order’s menu price.

The fee cap went into effect on Jan. 14 and ended June 15 when Massachusetts’ state of emergency was lifted.

The complaint says Grubhub routinely charged fees to restaurants that exceeded 18% of the order’s menu price.

On March 17, 2020, Massachusetts Gov. Charlie Baker ordered all restaurants to stop dine-in service. The aim was to slow the spread of the coronavirus. Many people, from restaurant owners to line cooks to regulars, thought this would be a quick fix and we'd all be back to eating and drinking at our favorite neighborhood spots no later than Memorial Day. That was not the case.

“We allege that Grubhub knowingly and repeatedly violated the fee cap statute, raising costs by thousands of dollars and harming restaurants that were already financially distressed and trying to survive,” Attorney General Maura Healey said.

An email seeking comment was sent to Chicago-based Grubhub’s media relations department.

Healey in a statement said her office sent letters to Grubhub and other online food delivery service platforms in February reminding them that the 15% fee cap was in place. The attorney general’s office then sent a cease-and-desist letter to Grubhub in May.

Demand for food delivery soared during the coronavirus pandemic and several states and cities placed caps on fees.

Copyright AP - Associated Press
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