Pa. settles with Grubhub after complaints of app's higher prices
PHILADELPHIA (CBS) -- Local restaurants and foodies may feel some relief after officials reached a settlement with a major food delivery app.
Grubhub has agreed to pay $125,000 and change its practices to settle an investigation by the Pennsylvania Office of Attorney General, according to a statement released Monday.
For some users, Grubhub charged higher prices than if they had ordered from the restaurant directly. The company has agreed to add more information in the app regarding prices and disclose that in-app prices may be higher than what appears on the restaurant's menu.
Under the settlement with Pennsylvania, Grubhub will also shut down or transfer ownership of "microsites" created for restaurants. Grubhub created the sites "to help restaurants strengthen their online presence and digital brand. According to media reports, some restaurant owners said they were unaware the websites were created, though Grubhub said owners signed contracts that contained a provision about the websites.
"Grubhub's mission is to help restaurants grow," the company said in a news statement about the settlement, posted to its website. "We continue to spend millions of dollars in marketing annually to generate orders for our partners and boost support, visibility and order volume, and we are committed to evolving alongside the restaurant industry."
The $125,000 will be distributed to food banks and nonprofits in the state: Feeding Pennsylvania, the Central Pennsylvania Food Bank, the Greater Pittsburgh Community Food Bank, and Philabundance.