Connect with us

Business

L.A. County accuses Grubhub of 'bait-and-switch' with last-minute fees

Published

on

L.A. County accuses Grubhub of 'bait-and-switch' with last-minute fees

The price of the turkey on rye half-sandwich from Langer’s Delicatessen-Restaurant in Los Angeles, purchased through the delivery app Grubhub, starts around $17.

But at checkout, the costs mount. With additional fees and sales tax, the cost of a sandwich delivery can hit over $26.00. Plus tip.

L.A. County says it amounts to an illegal “bait-and-switch.”

In a lawsuit filed Wednesday against Grubhub, county lawyers argue the food delivery company has repeatedly flouted a state law barring false advertising by promoting meals at a cheaper price than what customers see at the checkout page.

“Grubhub has built this vast marketplace through practices that mislead consumers and restaurants and put the squeeze on the company’s delivery drivers,” the lawsuit says. “Multiple aspects of Grubhub’s business — and every transaction for food delivery — are suffused with deception.”

Advertisement

A Grubhub spokesperson said in a statement the company plans to “aggressively defend” itself in court.

“We’ve sought to engage in a constructive dialogue with the Los Angeles County Counsel’s office to explain our business and identify any areas for improvement,” a company spokesperson wrote. “We are disappointed they have moved forward with this lawsuit because our practices have always complied with applicable law, and in any event, many of the allegations are incorrect or have been discontinued.”

The lawsuit refers to a Grubhub webpage with a banner that says customers can “order online for free” at Los Angeles restaurants near them. In reality, the lawsuit says, they cannot.

Grubhub said it is working on removing the language “from all existing materials.”

“This lawsuit sends a clear message: Los Angeles County will not tolerate businesses that deceive consumers, take advantage of restaurants, and exploit the drivers who work hard to provide a valued service,” said Supervisor Lindsey Horvath, the board chair, in a statement.

Advertisement

It’s the latest government action aimed at preventing companies from hitting consumers with surprise charges. A new state law goes into effect this summer prohibiting last-minute “junk fees” across a long list of businesses, including delivery apps. Atty. Gen. Rob Bonta, who co-sponsored the measure, has promised “the price Californians see will be the price they pay.”

The attorney general’s office has said that once the law goes into effect, delivery apps cannot tack on miscellaneous fees at the end of the transaction.

The county’s lawsuit argues the status quo hurts not only Grubhub’s customers, but also the drivers and restaurants who serve them.

According to the lawsuit, restaurants signing up for Grubhub were not properly warned that they would have to refund money to dissatisfied customers even if the restaurants didn’t believe they had made a mistake with the order. Restaurants are also at a disadvantage if they don’t pay the company extra marketing fees, the county alleged.

Grubhub gives more search prominence to restaurants that pay more in marketing fees, though most customers likely don’t realize this, the suit alleges. Instead, customers may believe the restaurants they’re seeing higher in the search ranking are the closest or the most popular.

Advertisement

“These practices inflict financial harm on L.A. County’s residents, restaurants and workers and are unacceptable while so many of them struggle to make ends meet,” Rafael Carbajal, director of the county’s Department of Consumer and Business Affairs, said in a statement.

Grubhub came under fire from its California delivery drivers in 2020 after the company rolled out a new charge — called the driver benefits fee — to help cover the costs that came under Proposition 22, a voter-approved ballot measure that guaranteed delivery drivers who clock a certain number of hours a healthcare stipend, among other benefits.

As part of the rollout, the company defaulted to no tip. Drivers said their earnings were slashed as a result.

The lawsuit alleges the way Grubhub explains the driver benefits fee continues to deter customers from tipping.

Grubhub explains the fee to consumers as helping guarantee “minimum wage and healthcare benefits for our drivers so they don’t have to depend on tips,” the lawsuit says. In reality, many drivers don’t qualify for the stipend and are fully dependent on tips, the county alleges.

Advertisement

Grubhub said the company has worked to make it easier for restaurants to dispute refunds and plans to clarify the benefits drivers receive as a result of Proposition 22. It also said marketing fees only affect the searches customers see in “certain, limited circumstances.”

In 2022, Grubhub settled a similar suit with Washington, D.C., for $3.5 million after the district’s attorney general accused the company of manipulating customers with “hidden fees.” Under the settlement, Washington received $800,000, and $2.7 million went back into the accounts of Grubhub customers.

Business

Video: Why Your Paycheck Feels Smaller

Published

on

Video: Why Your Paycheck Feels Smaller

new video loaded: Why Your Paycheck Feels Smaller

Ben Casselman, our chief economics correspondent, explains why wages are not keeping up with inflation and what that means for American workers and the economy.

By Ben Casselman, Nour Idriss, Sutton Raphael and Stephanie Swart

April 18, 2026

Continue Reading

Business

Civil case against Alec Baldwin, ‘Rust’ movie producers advances toward a trial

Published

on

Civil case against Alec Baldwin, ‘Rust’ movie producers advances toward a trial

Nearly two years after actor Alec Baldwin was cleared of criminal charges in the “Rust” movie shooting death, a long simmering civil negligence case is inching toward a trial this fall.

On Friday, a Los Angeles Superior Court judge denied a summary judgment motion requested by the film producers Rust Movie Productions LLC, as well as actor-producer Baldwin and his firm El Dorado Pictures to dismiss the case.

During a hearing, Superior Court Judge Maurice Leiter set an Oct. 12 trial date.

The negligence suit was brought more than four years ago by Serge Svetnoy, who served as the chief lighting technician on the problem-plagued western film. Svetnoy was close friends with cinematographer Halyna Hutchins and held her in his arms as she lay dying on the floor of the New Mexico movie set. Baldwin’s firearm had discharged, launching a .45 caliber bullet, which struck and killed her.

The Bonanza Creek Ranch in Santa Fe, N.M. in 2021.

Advertisement

(Jae C. Hong / Associated Press)

Svetnoy was the first crew member of the ill-fated western to bring a lawsuit against the producers, alleging they were negligent in Hutchins’ October 2021 death. He maintains he has suffered trauma in the years since. In addition to negligence, his lawsuit also accuses the producers of intentional infliction of emotional distress.

Prosecutors dropped criminal charges against Baldwin, who has long maintained he was not responsible for Hutchins’ death.

“We are pleased with the Court’s decision denying the motions for summary judgment filed by Rust Movie Productions and Mr. Baldwin,” lawyers Gary Dordick and John Upton, who represent Svetnoy, said in a statement following the hearing. “He looks forward to finally having his day in court on this long-pending matter.”

Advertisement

The judge denied the defendants’ request to dismiss the negligence, emotional distress and punitive damages claims. One count directed at Baldwin, alleging assault, was dropped.

Svetnoy has said the bullet whizzed past his head and “narrowly missed him,” according to the gaffer’s suit.

Attorneys representing Baldwin and the producers were not immediately available for comment.

Svetnoy and Hutchins had been friends for more than five years and worked together on nine film productions. Both were immigrants from Ukraine, and they spent holidays together with their families.

On Oct. 21, 2021, he was helping prepare for an afternoon of filming in a wooden church on Bonanza Creek Ranch. Hutchins was conversing with Baldwin to set up a camera angle that Hutchins wanted to depict: a close-up image of the barrel of Baldwin’s revolver.

Advertisement

The day had been chaotic because Hutchins’ union camera crew had walked off the set to protest the lack of nearby housing and previous alleged safety violations with the firearms on the set.

Instead of postponing filming to resolve the labor dispute, producers pushed forward, crew members alleged.

New Mexico prosecutors prevailed in a criminal case against the armorer, Hannah Gutierrez, in March 2024. She served more than a year in a state women’s prison for her involuntary manslaughter conviction before being released last year.

Baldwin faced a similar charge, but the case against him unraveled spectacularly.

On the second day of his July 2024 trial, his criminal defense attorneys — Luke Nikas and Alex Spiro — presented evidence that prosecutors and sheriff’s deputies withheld evidence that may have helped his defense . The judge was furious, setting Baldwin free.

Advertisement

Variety first reported on Friday’s court action.

Continue Reading

Business

California’s gas prices push Uber and Lyft drivers off the road

Published

on

California’s gas prices push Uber and Lyft drivers off the road

The highest gas prices in the country are making it tougher for some gig drivers to make a living.

Gas prices have shot up amid the war in the Middle East. On average, California gas prices are the most expensive in the United States, according to data from the American Automobile Assn. The average price of regular gas in California is almost $6. The national average is a little above $4.

While Uber and Lyft drivers have concocted clever ways to cut gas consumption, they say that without some relief they will be forced to leave the ride-hailing business.

John Mejia was already struggling to make money as a part-time Lyft driver when soaring gas prices made his side hustle even harder.

“Unfortunately, it’s the economics of paying less to drivers and gas prices,” he said. “It actually is pulling people out of the business.”

Advertisement

Guests at The Westin St. Francis hotel get into an Uber.

(Jess Lynn Goss / For The Times)

Gig work offers drivers the freedom to work for themselves and more flexibility, but being independent contractors also means they must shoulder unexpected costs.

Ride-sharing companies say they’re trying to help, but drivers say the gas relief comes with caveats. For now, drivers say they’re being pickier about what rides they accept, cutting hours and are looking at other ways to make money.

Advertisement

Mejia, who started driving for Lyft more than a decade ago, said in his early days, he would sometimes make $400 in three hours. Now it takes 12 hours to rake in $200.

The San Francisco Bay Area consultant is an active member of the California Gig Workers Union, so he knows he isn’t alone. California has more than 800,000 gig rideshare drivers, according to the group, which is affiliated with the Service Employees International Union.

On social media sites such as Reddit and Facebook, gig workers have posted about how the higher gas prices are eating into their earnings. Among the tricks they are suggesting: reducing the number of times the ignition is turned on or off, avoiding traffic, working in specific neighborhoods and at times with high demand and switching to electric vehicles.

Gig drivers usually have only seconds to decide whether to accept a ride on the app, but they have become more strategic about which rides and deliveries they accept.

That means they are more likely to sit back in their cars and wait for higher fares for quick pick-up and drop-off.

Advertisement

“I highly recommend the ‘decline and recline’ strategy, rejecting unprofitable rides until a better one appears,” wrote Sergio Avedian, a driver, in the popular blog the Rideshare Guy.

Pedestrians cross the street in front of a Lyft and Uber driver.

Pedestrians cross the street in front of a Lyft and Uber driver on Wednesday. High gas prices have made it hard for gig drivers to make a living, cutting into their profits.

(Jess Lynn Goss / For The Times)

Uber, Lyft and other companies have unveiled several ways to help drivers save on gas.

Uber said drivers can get up to 15% cash back through May 26 with the Uber Pro card, a business debit Mastercard for drivers and couriers. Based on a worker’s tier, they can get up to $1 off per gallon of gas through Upside — an app that offers cash rewards — and up to 21 cents off per gallon of gas with Shell Fuel Rewards. The company also offers incentives for drivers who want to switch to electric vehicles.

Advertisement

“We know the price of gas is top of mind for many rideshare and delivery drivers across the country right now,” Uber said in a blog post about its gas savings efforts.

Lyft also said it’s expanding gas relief through May 26 because the company knows that the extra cost “hits hardest for drivers who depend on driving for their income.”

The company is offering more cash back, depending on the driver’s tier, for drivers who use a Lyft Direct business debit card to pay for gas at eligible gas stations. They can get an additional 14 cents per gallon off through Upside.

Drivers say the fine print on the offers dictates which card they use and where they fill up gas, making it difficult for them to save money.

“If I do the math, it’s ridiculous,” Mejia said. “They’re offering us nothing.”

Advertisement

Uber declined to comment, but pointed to its blog post about the gas relief efforts. Lyft also referenced the blog post and said “the gas savings were structured through rewards to maximize stackable opportunities.”

Guests at The Westin St. Francis hotel get into an Uber.

Guests at The Westin St. Francis hotel get into an Uber.

(Jess Lynn Goss / For The Times)

Gig workers have struggled with rising gas prices in the past.

In 2022, Lyft and Uber temporarily added a surcharge to their fares amid record-high gas prices following Russia’s invasion of Ukraine. This year, Uber is adding a fuel charge to its fares in Australia for roughly two months to offset the high cost of gas for drivers. Lyft said it hasn’t added a fuel charge in the U.S. or elsewhere.

Advertisement

Margarita Penalosa, who drives full time for Uber and Lyft in Los Angeles, started as a rideshare driver in 2017. Back then, gas was cheaper. She would easily hit her goal of making $300 in eight hours. Now she’s making just $250 after working as much as 14 hours.

Gas prices, she said, used to be less than $3 per gallon. Now some gas stations are charging more than $8 per gallon.

“Take out the gas. Take out the mileage from my car and maintenance. How much [do] I really make? Probably I get $11 for an hour,” she said.

Jonathan Tipton Meyers wants to spend fewer hours as a rideshare driver.

He already juggles multiple gigs even while driving for Uber and Lyft in Los Angeles. He’s a mobile notary and loan signing agent, a writer and performer.

Advertisement

Driving is “a very challenging, full-time job,” he said. “It’s very taxing and, of course, wages were just continually decreasing.”

A man stands for a portrait in a white button up shirt

John Mejia, a longtime Lyft and Uber driver, poses for a portrait before attending a meeting about unionizing gig drivers.

(Jess Lynn Goss / For The Times)

Even if oil continues to flow through the Strait of Hormuz, which Iran reopened Friday, it could take a while for gas prices to come down to earth, said Mark Zandi, the chief economist at Moody’s Analytics.

“There’s an old adage that prices rise like a rocket and fall like a feather,” he said. “I think that’ll apply.”

Advertisement

In the meantime, it will be survival of the fittest drivers. If enough of them decide to leave the apps, the ride-hailing companies could be forced to raise fares further to attract some back.

“Those who approach rideshare driving strategically, tracking expenses, choosing trips carefully, and optimizing efficiency are far more likely to weather periods of high gas prices,” wrote Avedian in the Rideshare Guy blog. “For everyone else, a spike at the pump can quickly turn rideshare driving from a side hustle into a money-losing venture.”

Continue Reading
Advertisement

Trending