Grubhub Finally Pays Up for Those 'Misleading' Earnings Claims, Because Of Course
Grubhub dishes out $23.8 million to 640,038 people after FTC and Illinois AG cried foul over deceptive practices, including phantom restaurants and fairy-tale earnings promises.
It's payout o'clock for Grubhub, as over half a million drivers and customers are set to receive a slice of a $23.8 million pie following allegations that the food delivery giant played fast and loose with the truth about earnings and other dubious practices.
The Federal Trade Commission (FTC) announced on Wednesday that it's distributing the funds to 640,038 consumers, with most getting their checks via snail mail. Some lucky recipients will see their windfall via PayPal, proving that even settlements have preferred payment methods.
This financial redistribution stems from a lawsuit filed by the FTC and the Illinois attorney general back in December 2024. The complaint alleged a smorgasbord of misdeeds, including misleading claims about driver earnings potential, restricting customers' access to their accounts and funds, and listing restaurants without their permission - because nothing says 'trustworthy' like adding establishments to your platform that never agreed to be there.
Speaking of which, the FTC claimed Grubhub had as many as 325,000 unaffiliated restaurants on its platform, presumably to make its menu look more extensive than a gas station's snack aisle. The company also allegedly refused to remove some restaurants after they asked to be delisted, instead trying to upsell them into paid partnerships. That's the gig economy equivalent of a telemarketer who won't take no for an answer.
As part of the settlement, Grubhub must now shape up in several ways: advertise driver earnings more accurately, provide a way for customers to challenge account restrictions that lock them out of their funds, and get a restaurant's consent before listing it. Revolutionary concepts, we know.
This latest announcement shines a spotlight on Grubhub's treatment of its workforce and diners, and it comes just one month after a federal judge gave the green light to another settlement - a nearly $25 million one involving about 60,000 California drivers. Apparently, the company's been busy making amends like a billionaire on a PR spree.
Grubhub isn't alone in the regulatory crosshairs, though. DoorDash has faced its own legal tangles over driver pay, and Uber Eats has dealt with accusations about customer charges and restaurant relationships. It's almost like the food delivery industry has a systemic issue with transparency, but who are we to judge? We're just here for the snacks.
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