Policy & Regulation
Grubhub's $23.8M FTC settlement finally reaches diners and drivers
The FTC is distributing $23.8 million to 640,038 Grubhub drivers and customers over allegations the company misled workers about earnings and used deceptive practices.
Well over 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 their potential earnings and engaged in other deceptive practices. The Federal Trade Commission (the U.S. consumer-protection regulator) announced Wednesday that it’s distributing the money to 640,038 consumers, with most recipients receiving a check in the mail and some getting payments through PayPal.
The payouts stem from a lawsuit the FTC and the Illinois attorney general filed against Grubhub in December 2024. The complaint accused the company of a range of unlawful practices, including making misleading claims about how much drivers could earn, restricting customers’ access to their accounts and money, and listing restaurants on its platform without their permission. According to the complaint, Grubhub had as many as 325,000 restaurants on its platform that were not affiliated with the company, which the FTC alleged Grubhub used to make its platform appear larger. The complaint also alleged Grubhub sometimes refused to remove restaurants after they asked to be taken off the platform, instead trying to convince some of those businesses to enter paid partnerships.
The settlement requires Grubhub to change how it operates in several areas — the company must be more accurate when advertising potential driver earnings, give customers a way to challenge account restrictions that block access to their accounts or funds, and obtain a restaurant’s consent before listing it on the platform.
The announcement puts renewed attention on Grubhub’s treatment of its drivers and diners, coming just one month after a federal judge granted final approval of another settlement worth nearly $25 million involving about 60,000 Grubhub delivery drivers in California. Grubhub isn’t the only delivery company facing scrutiny: DoorDash has faced criticism over driver compensation, while Uber Eats has dealt with allegations involving customer charges and its restaurant relationships.
Why it matters
The settlement adds to a pattern of regulatory action against gig-economy delivery platforms over how they represent driver pay and inflate their restaurant listings — pressure likely to keep shaping how these companies market themselves to both sides of the marketplace.