Two restaurant owners who were added to Grubhub’s platform without their consent claim the company instructed drivers to call in orders to the restaurants themselves, as if they were customers. The plaintiffs say Grubhub is breaking the law by misleading customers and potentially harming restaurants’ reputations. The proposed class-action suit against Grubhub has yet to be certified. (San Francisco Chronicle)
Talking point: The suit follows an aggressive new growth plan Grubhub announced last year in the wake of heightened competition from food-delivery platforms like DoorDash and Uber Eats. After seeing its stock drop 40 per cent, the company told investors it would add “non-partnered” restaurants to boost its numbers. The model works by passing costs typically charged to restaurants directly onto customers. The company’s CEO Matt Maloney admitted in an investor call last year that the arrangement creates “a bad experience for diners, it’s a bad experience for drivers, it’s a bad experience for restaurants,” but noted that competitors have had success growing their networks using the model.