BOSTON, Massachusetts – Grubhub has reached a settlement with the state of Massachusetts over fees charged to restaurants during the pandemic. The settlement amounts to $3.5 million and resolves a lawsuit filed by Massachusetts Attorney General Maura Healey.
The lawsuit alleged that Grubhub had charged “excessive fees” to restaurants that used its platform for food deliveries. According to the agreement, Grubhub will pay restitution to affected restaurants and also change its business practices to clearly disclose its fees and provide increased transparency.
The settlement comes after an investigation by the Massachusetts Attorney General’s Office, which found that Grubhub’s fees could range from 10% to 40% per order. These fees placed a burden on restaurants already struggling to stay afloat during the pandemic.
Restaurants have faced significant challenges throughout the past year due to restrictions and closures imposed to curb the spread of COVID-19. Many have relied on delivery platforms like Grubhub to generate revenue during this difficult time. However, the high fees charged by these platforms have been a source of frustration for many restaurant owners.
The settlement between Grubhub and Massachusetts sets a precedent for other states and municipalities that may be considering similar lawsuits. It sends a message to delivery platforms that they must be transparent about their fees and operate in a fair and reasonable manner.
Grubhub has faced criticism in the past for its fee practices. As more and more customers turned to online food delivery during the pandemic, the company’s revenue soared. However, restaurants argued that they were being squeezed by the high fees and that the delivery platforms were taking advantage of their precarious financial situation.
The settlement with Massachusetts is a significant step towards addressing these concerns. By holding Grubhub accountable and requiring increased transparency, the state aims to protect its struggling restaurant industry and ensure fairness in the delivery marketplace.
In conclusion, Grubhub has settled a lawsuit with Massachusetts over fees charged to restaurants during the pandemic. The $3.5 million settlement seeks to provide restitution to affected restaurants and bring about changes in Grubhub’s business practices. This settlement sets a precedent for other states and sends a message to delivery platforms that transparency and fairness are essential in the industry.