Grubhub Still Owes NYC Restaurants Money Over Its Failed Free Lunch Promo

Grubhub has been described as a pioneer among food delivery apps. But perhaps "cowboy" is more apt. To wit, in 2020, a class-action lawsuit accused Grubhub of listing restaurants on its platform without the permission of said restaurants, per Class Law Group. The following year, the City of Chicago alleged Grubhub engaged in deceptive pricing tactics (via Eater Chicago). Now Grubhub's pricing tactics are being called into question once again, this time in a lawsuit brought in March by the Attorney General for the District of Columbia, who alleges, among other things, that customers in the D.C. area were charged by Grubhub for deliveries advertised as free (per TechCrunch). 

Gee, now that sounds vaguely familiar. Didn't Grubhub just run a free lunch promotion in the New York City area that ended up costing the restaurants money and aggravation? Why, yes, yes it did. NPR reports that due to technical difficulties, not to mention an apparent failure to plan for the deluge of orders that might have been reasonably expected to ensue when you tell New Yorkers that lunch will be free, the whole thing was a bust. And not just to the thousands of disgruntled would-be customers who ended up with no lunch at all, but also to the restaurant workers who tried to process the impossible influx of orders. Nor should we forget about the restaurant owners, many of whom are still waiting for refunds from Grubhub in respect of undelivered orders.

Restaurateurs weren't surprised by the chaos that ensued when Grubhub offered New Yorkers free lunch on May 17, or, more specifically, a $15 credit toward lunch (per Eater NY). Indeed, Grubhub has a reputation for "prioritizing profits over the people its apps serve and employ." The element of surprise emerged primarily in the aftermath of the debacle, as restaurants found themselves out-of-pocket for undelivered and unpaid-for orders, despite that Grubhub had promised restaurants at the outset that it would take full financial responsibility for all orders placed during the designated three-hour free-lunch window, (via NY Post). 

Nevertheless, as of June 7, Grubhub has still not made restaurants whole, notes Eater, and in some cases, the Post reports that the damages are in the thousands. On June 6, the Post reported that after many frustrating days of radio silence, Grubhub finally issued a statement, via email, that "all orders from the Free Lunch Promo will be refunded." 

Since the app registered a total of around 400,000 orders, per NPR, that could take time. However, Grubhub indicated to the Post that it intended to get that in the works starting this week. The question is, how will Grubhub compensate restaurants who believe Grubhub's failed promotion damaged their brand? While some are doing their own damage control, per the Post, there is always the possibility of yet another litigation naming Grubhub as the defendant. Stay tuned.