Grubhub’s $24 Million FTC Settlement: Now Benefits Are Rolling Out to Diners and Drivers
Over 500,000 Grubhub drivers and customers will soon receive a total of $23.8 million in compensation after the company was accused of misleading its workforce about potential earnings and partaking in various deceptive practices.
The Federal Trade Commission (FTC) announced that funds will be distributed to 640,038 individuals, with most receiving checks by mail, while others may get their payments via PayPal.
These payments are a result of a lawsuit jointly filed by the FTC and the Illinois Attorney General against Grubhub in December 2024. The lawsuit asserted that the company engaged in several illegal practices, including making false claims about driver earnings, restricting customer access to their accounts and funds, and listing restaurants on its platform without permission.
One significant allegation involved the restaurant listings. The complaint stated that Grubhub had around 325,000 restaurants on its platform that were not associated with the company. The FTC claimed that Grubhub utilized these listings to enhance the perceived size of its platform.
Additionally, the complaint indicated that Grubhub often ignored requests from restaurants wishing to be removed from its platform. Instead, the company reportedly attempted to persuade these businesses to participate in paid partnerships.
As part of the settlement, Grubhub is mandated to adjust its operational practices in several ways. The company must provide accurate representations of potential earnings for drivers, offer customers the option to contest account restrictions that prevent access to their accounts or funds, and obtain consent from restaurants before listing them on its platform.
This announcement casts a renewed light on Grubhub’s dealings with its drivers and customers, as well as the company’s overall business practices. It follows a recent ruling where a federal judge approved another settlement close to $25 million, impacting around 60,000 Grubhub delivery drivers in California.
Grubhub is not alone in facing scrutiny within the food delivery industry. Other companies like DoorDash have experienced criticism and legal issues over similar concerns regarding driver compensation, while Uber Eats has been involved in controversies related to customer fees and its dealings with restaurants.
