Grubhub delivery service accused of targeting local restaurants in federal class-action suit

DENVER (KDVR)  — The popular food delivery service Grubhub is “intentionally misleading consumers during a pandemic to maximize profits” at the expense of many small business owners, according to claims made in a federal lawsuit filed Monday in Denver.

“I just think that everyone needs to play fair, and Grubhub just isn’t doing that,” said Ross Ziev, the attorney who filed the class-action suit.

Ziev accused Grubhub of using misleading, online messaging to steer business away from local restaurants that do not pay to partner with the delivery service. 

Ziev said Grubhub is telling consumers that some local restaurants are not accepting online orders when, in fact, they are accepting orders through alternative ordering platforms.

“They (Grubhub) will do everything that they can to steer their customers back to where they can make money. And unfortunately, that’s on the backs of a lot of these local restaurants that are trying to survive,” Ziev said.

“It’s absolutely devastating, and it’s appalling that this company does these practices,” said Erik Riggs, who owns Freshcraft, the 16th Street Mall craft beer bar and kitchen named as the plaintiff in the suit. 

Ziev said if someone were to Google “Freshcraft delivery,” a link to order food through Grubhub would present itself online.

However, when a consumer clicks the link, this message appears: This restaurant is not taking online orders. Try a similar restaurant nearby.  The site advertises other restaurant choices, like McDonald’s and Pepper Asian Bistro, as possible alternatives for the consumer.

Ziev said this is problematic because Freshcraft is open for business Tuesday through Sunday, and it is taking orders, just not through Grubhub.

“These messages are posted intentionally, fraudulently and with conscious disregard for the truth of whether the restaurant is actually closed, whether it is open for takeout, or whether it is supplying delivery orders with a Grubhub competitor,” the suit alleges.

Grubhub told the FOX31 Problem Solvers it does not comment on pending litigation but that its mission is to “connect hungry diners with great, local restaurants.”

“We’re committed to helping restaurants, drivers and diners through this challenging time and are investing tens of millions of dollars into programs that directly drive more business to our restaurant partners,” a spokesperson said.

Riggs said customers can order from his business by calling or visiting the restaurant’s website directly and clicking the order now button. 

“It is a tough time for us more than any,” said Riggs of local restaurants. “Your McDonald’s, your Starbucks, your Walmarts of the world, they will be just fine. It’s people like me that own businesses that work hard to keep these businesses afloat that are working even harder right now.”

Riggs said he chose not to partner with Grubhub, so he would have control over how food from his restaurant is delivered and to avoid the fees associated with a partnership.

“There are restaurants, like me, all over the country that are struggling very, very hard right now, and they need all the help they can get. This is just an unnecessary hurdle for us,” he said.