New Chipotle Lawsuit Alleges Restaurant ‘Cloaks’ Costly Service Fee Within Tax Charged for Online Orders

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A proposed class action lawsuit alleges Chipotle has effectively lied to online customers by hiding a hefty service fee within the tax charged for each delivery order.

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The 23-page Chipotle lawsuit alleges the Mexican fast-casual restaurant, in an apparent example of “textbook fraud,” hides the service fee at issue “inside of a ‘Tax’ burrito,” as the charge is accessible only by clicking a drop-down “v” next to “Tax” on the checkout page. The case says that by hiding the service fee “under the cloak of taxes” in the online ordering process, Chipotle can “unjustly enrich itself by falsely making people believe they are paying taxes for the public good.”

The case contends, however, that “[the] math doesn’t add up” given that the Chipotle service fee in the example above amounts to 20 percent of the order subtotal.

The suit adds that Chipotle’s prominent disclosure of the $1 delivery fee is intentionally misleading as consumers believe that is the only fee being charged.

“In just the example shown above, the ‘Service Fee’ is more than seven times larger than the quoted ‘Delivery Fee,’” the filing says, arguing that the Chipotle delivery fee itself is misleading since it does not represent the true added costs of delivery.

In fact, it’s only after a transaction is completed that Chipotle discloses to the consumer that menu pricing is higher for delivery orders—about 50 percent higher, according to the food delivery case.

“In fact, many of Chipotle’s consumers, who have grown accustomed to burritos and bowls for around $10 will be shocked to realize that the same price of those items when ordered for delivery are closer to $15.”

The Chipotle service fee class action looks to cover all United States residents who paid a Chipotle service fee while ordering food for delivery through the restaurant’s app or website.

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