HARRISBURG, Pa. (WHTM) – Pennsylvania Attorney General Josh Shapiro announced Monday that an agreement has been reached with Grubhub regarding in-app pricing transparency.
An investigation conducted by federal prosecutors focused on price differences between the app and ordering at the actual restaurant. When ordering food through the Grubhub app, customers were sometimes charged higher prices for the items ordered than if they ordered directly from the restaurant.
As part of the agreement, Grubhub will make $125,000 in donations to a number of food banks across Pennsylvania.
“Online grocery delivery platforms can be very convenient, but consumers deserve transparency so they can make informed decisions about whether to place an order. I’m pleased that Grubhub has agreed to make pricing simpler,” said Attorney General Shapiro. “This is another step towards a fairer marketplace for restaurants and consumers – and I urge all food delivery platform companies to provide that same transparency as soon as possible.”
Attorney General Josh Shapiro asked Grubhub to add additional disclosures on its app and website, stating that prices on the platform may be higher than those of the restaurant. Grubhub adds these disclosures to its menu pages and checkout page.
The investigation also found that Grubhub used routing numbers, microsites — separate websites featuring the restaurant’s menu — and undisclosed partnerships with third-party sites like Yelp or menupages.com. The misrepresentation undermined consumers’ ability to shop and compare prices.
It also found that if a consumer called a Grubhub routing phone number and wanted to order directly from the restaurant, they might have thought they were calling the restaurant, but would reach a Grubhub customer service representative and potentially pay higher prices and fees to have.
AG Shapiro would also like consumers to be aware of the following:
- Items are often more expensive in the app – You will be charged a higher price for items in delivery apps than if you had bought the item in person. These fees are in addition to the delivery app fees.
- Fees are charged by delivery apps – Fees are charged when ordering items for delivery in the delivery apps. These charges include service charges, delivery charges, and a tip that the consumer assigns to the delivery driver. Depending on the order, additional fees may apply, e.g. B. Large order fees, small order fees and “bump” fees for high demand items.
- Restaurants pay commissions to the delivery apps – Restaurants can pay a percentage of each order as a commission to the delivery apps, in addition to the fees customers pay. Consumers who want their entire payment to be paid to the restaurant should order directly from the restaurant.
Grubhub’s $125,000 payment will be distributed equally to the following pre-vetted charities: Feeding Pennsylvania, Central Pennsylvania Food Bank, Greater Pittsburgh Community Food Bank and Philabundance.
This investigation and settlement were conducted and conducted by Sarah Frasch, Chief Deputy Attorney General and Director of the Bureau of Consumer Protection, Catherine Twigg, Deputy Attorney General, and Jessica Nelson, Senior Civil Investigator.