By Benyamin Davidsons
Senator Charles Schumer is taking a stand against Grubhub, telling the company to “eat any fees” they wrongfully charge their customers for phone calls in which no order is actually placed. On Sunday, the Senior New York senator asked the federal Small Business Administration to send a report to Congress detailing the “bogus fees” that Grubhub has been allegedly charging restaurants. As reported by Crain’s NY, Schumer also instructed the Federal Trade Commission to be prepared to act in response to the findings of that report.
In May, the food-delivery giant was accused of charging restaurants in NYC $4 to $9 fees for phone calls, even if no food order was placed. For the mobile food ordering company, which now boasts 19.9 million active users spanning 2,200 cities across the U.S., this can end up being a pretty penny. “Bogus fees of any kind add up fast—one dollar or two here and there—and before you know it, a big company like Grubhub has millions of dollars they never really earned,” Schumer said. “Today, I am putting in my own order at Grubhub and asking them to eat any fees they wrongfully charged restaurants or even customers.”
The issue is being taken seriously across the board by state and federal officials. In June, the City Council held a hearing about it, during which one federal SBA official said the added surcharges restaurants are paying for delivery are taking a bite out of the eateries’ capacity to pay SBA-backed loans. Councilman Mark Gnojaj is going after Grubhub by requesting Attorney General Letitia James to open an antitrust investigation into the ordering app’s acquisition of its competitor, Seamless.
A Grubhub spokesman denied any wrong doing and said the company will work with Senator Schumer to “disprove the flagrantly inaccurate narrative that our business practices are misleading or lack transparency.”
“Restaurants have the ability to review and audit recordings of phone calls through their dedicated portal,” Grubhubs’s statement continued, “and can easily dispute any charges by providing context details to their account adviser or our restaurant-care team. Not only are phone orders addressed in our restaurant contracts, but we give restaurants full disclosure into these orders in their monthly statements with a separate, dedicated line item.”
