More than 640,000 Grubhub drivers and customers are set to receive a share of $23.8 million as the Federal Trade Commission (FTC) begins distributing funds from a settlement over allegations that the food delivery company misled workers about earnings and engaged in other deceptive practices. The FTC announced on Wednesday that payments are going out to 640,038 recipients, with most receiving checks in the mail and some receiving funds via PayPal.
The payouts stem from a lawsuit filed by the FTC and the Illinois Attorney General in December 2024. The complaint accused Grubhub of a range of unlawful practices, including making misleading claims about how much drivers could earn, restricting customers’ access to their accounts and money, and listing restaurants on its platform without their permission.
What the FTC alleged against Grubhub
One of the more striking allegations involved Grubhub’s restaurant listings. According to the complaint, the company had as many as 325,000 restaurants on its platform that were not affiliated with Grubhub. The FTC alleged that Grubhub used those listings to make its platform appear larger than it actually was, potentially misleading both consumers and potential restaurant partners.
The complaint also alleged that Grubhub sometimes refused to remove restaurants after they asked to be taken off the platform. Instead, the company allegedly tried to convince some of those businesses to enter into paid partnerships, effectively holding their listings hostage.
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Beyond the restaurant listings, the FTC’s complaint highlighted concerns about how Grubhub treated its drivers. The company was accused of advertising potential earnings in ways that were not accurate, leading drivers to sign up with unrealistic expectations about how much they could make.
What Grubhub must change
The settlement requires Grubhub to overhaul several aspects of its operations. Specifically, the company must:
- Be more accurate when advertising potential driver earnings
- Give customers a way to challenge account restrictions that leave them unable to access their accounts or funds
- Obtain a restaurant’s consent before listing it on the platform
These changes are designed to address the core issues raised in the lawsuit and to prevent similar practices from continuing in the future.
Recent scrutiny on Grubhub and the broader delivery industry
Wednesday’s announcement puts renewed attention on Grubhub’s treatment of its drivers and diners. Notably, it comes just one month after a federal judge granted final approval of another settlement worth nearly $25 million involving approximately 60,000 Grubhub delivery drivers in California. That separate case focused on driver compensation and working conditions, adding to the pressure on the company to reform its practices.
Grubhub is not the only delivery company to face scrutiny. In the past, DoorDash has faced criticism and legal challenges over driver compensation, while Uber Eats has dealt with allegations involving customer charges and its relationships with restaurants. The FTC’s action against Grubhub is part of a broader pattern of increased regulatory attention on the gig economy and food delivery sector.
For the 640,038 recipients, the payments represent a tangible outcome of the FTC’s enforcement efforts. While the average payout works out to roughly $37 per recipient, the significance goes beyond the dollar amount. The settlement sends a clear message that deceptive practices in the gig economy will not go unchecked.
As the checks go out, Grubhub will be under continued observation to ensure it complies with the terms of the settlement. The company’s ability to rebuild trust with drivers, restaurants, and customers will be closely watched in the coming months.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. The distribution of settlement funds and any related market developments are subject to change. Readers should conduct their own research before making any decisions.
