Grubhub, a prominent food delivery service, has commenced the distribution of $23.8 million to over 640,000 consumers and drivers. This action follows allegations of deceptive practices, including misleading earnings claims and unauthorized restaurant listings.
The Federal Trade Commission (FTC) announced that the majority of recipients will receive checks by mail, while some will obtain payments through PayPal. This disbursement is part of a settlement reached after a lawsuit filed in December 2024 by the FTC and the Illinois Attorney General. The lawsuit accused Grubhub of various unlawful practices, such as misrepresenting potential driver earnings, restricting customer access to accounts and funds, and listing restaurants without their consent.
One significant allegation was that Grubhub included up to 325,000 unaffiliated restaurants on its platform to enhance its perceived scale. The company allegedly resisted removing these listings even when requested by the restaurants, instead attempting to convert them into paid partnerships.
As part of the settlement, Grubhub is required to implement several operational changes. These include providing accurate information about driver earnings, offering customers a means to contest account restrictions, and obtaining explicit consent from restaurants before listing them on the platform.
This development highlights ongoing scrutiny of food delivery services regarding their treatment of workers, customers, and business partners. It underscores the necessity for transparency and ethical practices within the industry to maintain trust and compliance with regulatory standards.
