Grubhub has agreed to a hefty $25 million settlement following a lawsuit brought by the Federal Trade Commission and Illinois Attorney General Kwame Raoul. The lawsuit centers around allegations of deceptive business practices, including providing misleading information to customers and drivers, and listing restaurants on its platform without proper authorization.
The lawsuit asserts that Grubhub’s advertisements gave customers a false sense of the delivery costs. What was initially presented as a straightforward price would often balloon to almost double after accounting for additional “service fees” or “small order fees.” Moreover, drivers were reportedly lured with exaggerated promises of hourly wages far above the typical earnings.
Another contentious issue was the inclusion of approximately 325,000 restaurants on Grubhub’s platform without their consent, a move the FTC claims harmed both these establishments and their customers.
As part of the settlement, Grubhub is required to end these contested practices. In response, the company stated that although they “categorically deny” the allegations, some of which they believe to be incorrect or outdated, they opted to settle in order to focus on future endeavors. This decision, they assert, is in the best interest of the company.
