Business12 August, 20262 min read
FTC Sends $23.8 Million To Grubhub Drivers And Diners Over Deceptive Advertising
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FTC distributing $23.8 million to about 640,038 Grubhub drivers and customers. Part of December 2024 settlement with FTC and Illinois AG over deceptive practices.
FTC sends Grubhub checks
The Federal Trade Commission (FTC) announced it is sending “more than $23.8 million to drivers and diners harmed by Grubhub’s deceptive advertising claims and other unlawful conduct.” Payments are going out to 640,038 consumers who encountered Grubhub’s tactics, including promising cheap or free deliveries but later charging junk fees and blocking diner accounts with large gift card balances without warning.
The FTC said there is “no claims process; checks are already going out,” and that “Most consumers will receive a check in the mail,” with some recipients receiving compensation through PayPal. The FTC also said “Check recipients should cash their checks within 90 days,” while “PayPal recipients should redeem their PayPal payments within 30 days.”
Allegations and settlement terms
The payouts stem from a lawsuit filed by the FTC and the Illinois Attorney General against Grubhub in December 2024, with the complaint accusing the company of misleading delivery drivers about their potential earnings and restricting customers’ access to their accounts and funds. TechCrunch said the complaint accused Grubhub of “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.”
The FTC also alleged that Grubhub had as many as 325,000 restaurants on its platform that were not affiliated with Grubhub, and that the company used those listings to make its platform appear larger. Under the settlement, Grubhub must more accurately advertise potential earnings for delivery drivers, provide customers with a mechanism to appeal restrictions, and obtain consent from restaurants before adding them to the platform.
Company response and broader impact
Grubhub said in a statement that it is “committed to transparency so that every single day diners, restaurants, and drivers can make well-informed choices to do business with us.” In the same statement, Grubhub said it “categorically deny the allegations made by the FTC—many of which are wrong, misleading, or no longer applicable to our business,” while also saying it believed settling was in its “best interest.”
“Grubhub is committed to transparency so that every single day diners, restaurants, and drivers can make well-informed choices to do business with us.”
The FTC’s settlement announcement also followed a separate federal judge-approved deal involving nearly $25 million and approximately 60,000 Grubhub delivery drivers in California, according to TechCrunch. TechCrunch said the announcement “puts renewed attention on Grubhub’s treatment of its drivers and diners and the company’s broader business practices,” and it noted that DoorDash and Uber Eats have also faced scrutiny over driver compensation and customer charges.