More than half a million Grubhub drivers and customers are set to receive a share of $23.8 million following allegations that the food delivery company misled workers about potential earnings and engaged in other deceptive practices.
The Federal Trade Commission (FTC) announced on Wednesday that it's distributing the money to 640,038 consumers. Most recipients will receive a check in the mail, while some will be paid via PayPal.
The payouts stem from a lawsuit filed by the FTC and the Illinois Attorney General against Grubhub in December 2024. The complaint accused the company of a range of unlawful practices, including making misleading claims about driver earnings, restricting customers' access to their accounts and funds, and listing restaurants on its platform without permission.
One notable allegation concerned Grubhub's restaurant listings. According to the complaint, the company had as many as 325,000 restaurants on its platform that were not affiliated with Grubhub, using these listings to make its platform appear larger. The FTC also alleged that Grubhub sometimes refused to remove restaurants after they requested to be taken off the platform, instead attempting to convince some of those businesses to enter into paid partnerships.
As part of the settlement, Grubhub must change its business practices. The company is now required to:
- Advertise potential driver earnings more accurately
- Provide customers with a way to challenge account restrictions that prevent access to their accounts or funds
- Obtain a restaurant's consent before listing it on the platform
This announcement brings renewed attention to Grubhub's treatment of drivers and diners, as well as its broader business practices. Notably, it comes just one month after a federal judge granted final approval of another settlement worth nearly $25 million involving approximately 60,000 Grubhub delivery drivers in California.
Grubhub is not the only delivery company to face such scrutiny. In the past, DoorDash has faced criticism and legal challenges over driver compensation, while Uber Eats has dealt with allegations involving customer charges and its relationships with restaurants.
via TechCrunch