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Grubhub to Pay $25 Million for ‘Deceptive’ Practices Against Customers and Drivers
Grubhub has agreed to pay a staggering $25 million to settle claims of “deceptive” practices by the Federal Trade Commission (FTC) and Illinois Attorney General Kwame Raoul. The lawsuit alleges that the food delivery company engaged in a variety of unlawful tactics, including misleading customers about delivery costs, deceiving drivers about potential earnings, and listing restaurants on its platform without their consent.
According to the FTC and Attorney General’s claims, Grubhub hid the true cost of its delivery services, resulting in a final price that was often double what was originally advertised due to “service fees” or “small order fees.” Furthermore, the agencies assert that Grubhub’s ads inflated hourly pay rates for drivers well above what they would realistically earn.
Additionally, it is alleged that Grubhub had listed as many as 325,000 unaffiliated restaurants on its platform, causing significant harm to both these restaurants and customers. Under the proposed settlement, Grubhub will be required to cease such practices.
In response to the allegations, Grubhub stated that while they “categorically deny” some of the claims made by the FTC, many are “wrong, misleading or no longer applicable to our business.” Despite this denial, the company has chosen to settle the matter in order to move forward.
Source: techcrunch.com
