Grubhub to Distribute $23.8 Million FTC Settlement to Over 640,000 Customers and Drivers

Settlement Distribution Underway

Grubhub is beginning to distribute $23.8 million to over 640,000 customers and drivers. The Federal Trade Commission (FTC) announced that 640,038 recipients will receive payments, primarily through checks mailed to them, with some receiving funds via PayPal.

Allegations of Deceptive Practices

The payouts stem from a lawsuit filed by the FTC and the Illinois attorney general in December 2024. The complaint accused Grubhub of several unlawful practices, including making misleading claims about potential driver earnings, restricting customer access to accounts and funds, and listing restaurants on its platform without their consent. The FTC alleged that Grubhub listed as many as 325,000 unaffiliated restaurants to make its platform appear larger and sometimes refused to remove restaurants upon request, instead attempting to convert them into paid partnerships.

Required Operational Changes

As part of the settlement, Grubhub is required to implement changes to its operations. These include providing more accurate information regarding potential driver earnings, establishing a process for customers to challenge account restrictions, and obtaining explicit consent from restaurants before listing them on the platform.

Broader Scrutiny in the Delivery Industry

This settlement highlights ongoing scrutiny of Grubhub's business practices and its treatment of drivers and diners. This announcement follows a separate nearly $25 million settlement approved last month for approximately 60,000 Grubhub delivery drivers in California. Other delivery companies, such as DoorDash and Uber Eats, have also faced criticism and legal challenges concerning driver compensation, customer charges, and restaurant relationships.