Grubhub’s $24M FTC settlement is finally reaching diners and drivers

Following allegations that food delivery giant Grubhub misled its workers about potential earnings and engaged in deceptive practices, the Federal Trade Commission (FTC) announced on Wednesday that $23.8 million will be distributed among over half a million drivers and customers. Most recipients will receive their payments via check in the mail, while some will receive them through PayPal.

The payouts originate from a lawsuit filed by the FTC and Illinois Attorney General in December 2024, which accused Grubhub of various unlawful practices. These included making false claims about driver earnings, restricting customers' access to their accounts and money, and listing restaurants without their permission. The company was also found to have many restaurants on its platform that were not affiliated with Grubhub, which it used to make the platform appear larger.

Grubhub allegedly refused to remove restaurants that requested to be taken off the platform and sometimes tried to convince them to enter into paid partnerships. As a result of the settlement, Grubhub is required to improve its practices in several areas, such as being more accurate in advertising driver earnings, providing customers with a way to challenge account restrictions, and obtaining restaurant consent before listing them on the platform.

The announcement highlights the company's treatment of its drivers and diners and raises questions about its broader business practices. This comes just one month after a federal judge approved a nearly $25 million settlement involving around 60,000 Grubhub delivery drivers in California. Grubhub is not the only delivery company facing scrutiny, with DoorDash facing criticism over driver compensation and Uber Eats dealing with allegations related to customer charges and restaurant relationships.