Grubhub settlement: FTC distributes $23.8M to consumers

The Federal Trade Commission (FTC) has begun distributing more than $23.8 million in settlement payments to 640,038 consumers following a $25 million agreement with Grubhub. The settlement addresses allegations of deceptive advertising and unlawful business practices.

According to the FTC, Grubhub’s conduct included promising cheap or free deliveries while later applying junk fees, making it difficult to cancel Grubhub+ subscriptions, and blocking diner accounts with large gift card balances without warning. Additionally, the company allegedly overstated driver earnings, claiming potential pay of up to $40 per hour when the actual median was approximately $10 per hour.

Payments are being issued via mail or PayPal, with a median compensation amount of $51. The FTC advises that check recipients should cash them within 90 days, while PayPal recipients should redeem payments within 30 days. As part of the settlement, Grubhub is required to provide honest advertising regarding driver pay, implement a mechanism for users to dispute blocked accounts, and ensure restaurants are listed only with their consent.