If you’ve ever ordered food through GrubHub, you may have unknowingly paid hidden fees, ordered from a restaurant that wasn’t actually partnered with the platform, or assumed your delivery driver was getting fair pay—when they weren’t.
Now, after a lawsuit filed by the Federal Trade Commission (FTC) and the Illinois Attorney General, GrubHub is paying a $25 million settlement and making major changes to its business practices.
So, what went wrong—and how will this impact diners, restaurants, and drivers? Let’s discuss.
The Accusations Against GrubHub
According to the FTC and Illinois Attorney General case proceedings, GrubHub engaged in unfair and deceptive business practices that harmed everyone in the food delivery process. The lawsuit accused the company of:
- Misleading Diners About Delivery Costs
- Listing Restaurants Without Their Consent
- Shortchanging Delivery Drivers
As part of the settlement, GrubHub must now disclose full costs, properly compensate drivers, and only list restaurants that have agreed to be on the platform.
What This Means for Consumers
If you frequently order from GrubHub, expect more transparency in pricing. The platform has implemented a full cost disclosure, ensuring that customers will see the total price, including all fees, before placing an order.
Gone are the days when you would spend 45 minutes choosing a restaurant, only to find out that it had no relationship with GrubHub. With the new updates, only verified restaurants are listed, ensuring no unaffiliated places appear on the app without permission.
GrubHub will be monitored to make sure it follows these new policies.
Bottom line? Less trickery, more trust in where your food is coming from and how much you're actually spending.
What This Means for Restaurants
For years, restaurants have been frustrated with delivery apps listing their businesses without permission. This often resulted in problems like:
* Incorrect menu items or prices
* Orders being sent to restaurants that couldn't fulfill them
* Lost revenue from unhappy customers
Many small businesses felt powerless, with no say in how they were represented on these platforms, leading to a negative impact on their reputation and bottom line.
Now, GrubHub must have explicit consent before listing a restaurant on the app. This change gives small businesses more control over their brand and ensures they won’t be caught off guard by unprepared or inaccurate listings.
What This Means for Gig Workers
This settlement is part of a larger movement to protect gig economy workers.
Earlier this year, the FTC helped negotiate settlements for workers across multiple large platforms,focusing on improving pay transparency, offering more honest advertising of gig work opportunities, and ensuring fair compensation for drivers and freelancers.
For GrubHub drivers, this means a positive shift.
GrubHub was accused of misleading drivers about their earnings and not paying them what they were promised. With the required changes, drivers should see clearer pay structures and more accurate information about their wages, making it easier to understand how much they’ll actually make. These changes aim to give gig workers more control and fairness in a growing industry
Final Thoughts: A Win for Consumers, Workers, and Restaurants
While food delivery apps have made life more convenient, their business practices have often raised serious concerns. With this settlement, GrubHub is being forced to play fair, ensuring diners, restaurants, and delivery drivers get a more transparent and honest experience.
What do you think about this settlement? Should more delivery apps be investigated? Let us know in the comments!