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Food delivery service a hub of misrepresentation

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grubhub

Two restaurants are named in a proposed class-action lawsuit against Grubhub Inc. that claims the company used the names and logos of up to 150,000 restaurants it had no partnership with in an effort to cook up more business for the digital meal delivery company.

 

Antonia’s in Hillsborough, North Carolina, and the Farmer’s Wife in Sebastopol, California, alleged in their complaint that Chicago-based Grubhub “saw it was losing market share to competitors… and decided it needed to act fast to attract new users and retain its existing customer base,” according to the suit filed Monday in the U.S. District court for the Northern District of Illinois, Eastern Division, in Chicago.

 

The company “began researching which restaurants were most popular with consumers — and then added those restaurants to its platform without permission” the complaint states, adding that “the unauthorized use of popular restaurants’ names and logos had the desired effect” in revenue growth for Grubhub, which announced in June that it was selling its “thriving business” for $7.3 billion.

 

“Grubhub’s financial success has come at restaurants’ expense,” the complaint states, adding that when a customer places an order the driver calls in the order, pretending to be a customer picking up his or her own order.

 

The suit alleges that consumers “still think they’re getting a ‘direct line into the kitchen,’ but when they order from a restaurant that has been included on Grubhub without the restaurant’s permission, the result is a ‘suboptimal diner experience rife with operational challenges’ — or as Grubhub’s CEO succinctly put it, ‘the diner experience sucks.’”

 

“Consumers understandably blame the restaurants, who they think have partnered with Grubhub to provide them with accurate, reliable, and timely service,” the suit states. “The end result for restaurants is significant damage to their hard-earned reputations, loss of control over their customers’ dining experiences, loss of control over their online presence, and reduced consumer demand for their services.”

 

The plaintiffs are seeking a judgment finding that Grubhub has violated federal law by using restaurant names and logos without authorization and in a manner likely to confuse consumers; ordering that Grubhub “cease its unlawful conduct, turn over its ill-gotten gains, and pay damages to the restaurants it has harmed.”

 

Grubhub has not responded to the suit.

 

 

 

 

 

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