Grubhub Agrees to $25 Million Settlement Amid Allegations of Misleading Customers and Drivers

Grubhub pays $25 million for allegedly tricking customers and lying to drivers

Food delivery giant Grubhub has agreed to pay a hefty $25 million settlement to the Federal Trade Commission (FTC) following allegations that the company misled its customers and drivers. According to FTC Chair Lina Khan, Grubhub’s actions were egregious, stating that “Grubhub tricked its customers, deceived its drivers, and unfairly damaged the reputation and revenues of restaurants that did not partner with Grubhub.”

The proposed settlement requires Grubhub to make significant changes to its platform, including clearly displaying the total delivery cost when an order is placed. Additionally, the company must no longer advertise “highly inflated hourly pay rates for drivers” or hide the true cost of its services by tacking on surprise fees.

Grubhub’s alleged deceptive practices allegedly began around 2019, where the company would initially advertise lower delivery fees to attract new customers, only to later add a “service” fee that drastically increased the order price. The FTC also claimed that Grubhub charged customers for delivery despite advertising its “Grubhub Plus” subscription as offering “free” or “$0” deliveries.

Furthermore, the agency accused Grubhub of listing restaurants on its platform without their consent, resulting in issues with orders and negative feedback for these unaffiliated businesses.

Source: www.theverge.com