Food delivery company Grubhub will pay $25 million to settle allegations of deceptive practices against diners, workers, and small businesses. The Federal Trade Commission (FTC) claims that Grubhub deceived customers about delivery costs, blocked access to accounts, and misrepresented how much money drivers would make.
The FTC also alleges that Grubhub listed unaffiliated restaurants on its platform without their permission, damaging the reputation of those restaurants. To settle the complaint, Grubhub will stop adding surprise fees, remove unaffiliated restaurants from its platform, be more transparent about driver earnings, and notify customers if their accounts have been blocked.
The settlement comes as rising prices among food delivery services continue to frustrate consumers looking to reduce extra fees. According to Technomic, consumers reported higher yearly increases in their total checks on third-party apps compared to orders made directly through restaurant sites between 2022 and 2024.
Grubhub will pay $25 million, with nearly all of it going towards refunding consumers harmed by the company’s conduct. The FTC had initially demanded a $140 million judgment, but suspended part of it due to Grubhub’s good-faith negotiations and provision of detailed business information.
Source: https://www.cnbc.com/2024/12/17/grubhub-ftc-settlement-harmful-practices-diners-workers.html