Key facts
- Grubhub will pay $23.8 million to over 640,000 drivers and customers.
- The settlement addresses allegations of misleading driver earnings claims.
- Grubhub also faced accusations of listing restaurants without permission and restricting customer access to funds.
- The company must now obtain consent before listing restaurants and be more accurate about driver earnings.
- A previous settlement in California involving Grubhub drivers was approved last month for nearly $25 million.
Grubhub is set to distribute $23.8 million to more than 640,000 drivers and customers as part of a settlement with the Federal Trade Commission (FTC). The payments address allegations that the food delivery company engaged in deceptive practices, including misleading claims about driver earnings and listing restaurants without their consent.
The FTC announced the distribution on Wednesday, with most recipients expected to receive checks and some via PayPal. The settlement resolves a lawsuit filed in December 2024 by the FTC and the Illinois Attorney General. The complaint also accused Grubhub of restricting customer access to their accounts and money, and of refusing to remove restaurants from its platform upon request.
As part of the settlement, Grubhub must provide more accurate advertising of potential driver earnings, offer customers a way to challenge account restrictions, and obtain consent before listing any restaurant. This development brings renewed attention to the company's business practices and its treatment of drivers and diners.
This settlement follows a separate agreement where a federal judge granted final approval for a nearly $25 million settlement involving approximately 60,000 Grubhub delivery drivers in California just last month. Other delivery companies like DoorDash and Uber Eats have also faced scrutiny over driver compensation and business practices.