In a settlement with the Pennsylvania Attorney General's office, online food delivery marketplace Grubhub will now have to provide new, in-app transparency disclosures on price markups from local restaurants, Josh Shapiro's office announced Monday.
Grubhub will also provide $125,000 in donations to four food banks throughout Pennsylvania, including Philabundance, as part of the settlement.
The Office of the Attorney General's investigation "uncovered consumers were sometimes charged higher prices for the items they ordered than they would be if they ordered from the restaurant directly," the office said in a release.
Shapiro said he's pleased Grubhub agreed to make their pricing "more straightforward" with additional disclosures on the app and website that say the prices on the platform may be higher than in the restaurant. The AG's office said the disclosures will be added by Grubhub to their menu pages and the check-out page for visibility.
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The attorney general's investigation also found Grubhub has been using routing numbers, microsites (separate websites that house the restaurant's menu) and undisclosed partnerships with third-party websites such as Yelp or menupages.com.
"This misrepresentation concealed Grubhub’s true role in publishing restaurant information and in turn undermined consumers’ ability to shop around or compare prices," the AG's office wrote.
Business
The release states a consumer calling a Grubhub routing phone number may have wanted to order from a restaurant directly and believed they were calling them, but instead reached a Grubhub representative and paid a higher price along with the food delivery app's additional fees.
Shapiro also noted three things: items are often more expensive in the app, fees are charged by delivery apps and restaurants pay commissioners to the delivery apps.
Grubhub's $125,000 donation to the four food banks is in lieu of monetary damages, the attorney general's office said. It'll be evenly distributed between Philabundance, Feeding Pennsylvania, the Central Pennsylvania Food Bank and the Greater Pittsburgh Community Food Bank.
