Grubhub Distributes $23.8 Million to Deliverers and Customers Following FTC Settlement

The Federal Trade Commission has begun distributing $23.8 million among 640,038 customers and deliverers of Grubhub as part of a settlement that uncovered deceptive practices on the delivery platform. The checks arrive after a lawsuit was filed in December 2024 by the FTC and the Attorney General of Illinois.

• The FTC distributes $23.8 million among 640,038 affected consumers.
• Grubhub was accused of misleading about deliverers' earnings and listing restaurants without permission.
• The settlement requires changes in advertising, account access, and prior consent from restaurants.

The Federal Trade Commission (FTC) of the United States initiated the distribution of $23.8 million on Wednesday among more than 640,000 consumers affected by Grubhub's practices, one of the largest food delivery platforms in the country. The massive payment represents one of the most significant restitutions in the home delivery sector.

According to TechCrunch, the payments correspond to a judicial settlement that questioned the company's transparency in its relationships with deliverers and customers. The compensations come after more than a year and a half of regulatory litigation.

The FTC confirmed that 640,038 individuals will receive financial compensation as part of the agreement reached with the company. This figure exceeds the half a million beneficiaries that had initially been estimated.

Most beneficiaries will receive a check by postal mail, while a smaller group will receive funds through PayPal, the agency reported. Payments are being processed in stages over the coming days.

The distribution of funds stems from a lawsuit filed in December 2024 by the FTC and the Attorney General of Illinois against Grubhub. In that legal action, the platform was accused of multiple deceptive practices.

The central accusations included false claims about how much deliverers could earn and unfair restrictions on customer account access. These facts motivated the final agreement that is now materializing in direct payments.

The FTC and Illinois Attorney General's Accusations

The lawsuit filed in December 2024 detailed a series of illegal practices that the FTC and the Illinois Attorney General attributed to Grubhub. Regulators argued that the company prioritized growth over transparency.

One of the central accusations pointed out that the company made misleading claims about how much money deliverers could earn on the platform. Many workers may have made employment decisions based on inflated projections.

It was also charged with restricting customers' access to their accounts and money, without providing clear mechanisms to contest those restrictions. This practice left users without access to their own funds for prolonged periods.

Another serious accusation mentioned that the platform had up to 325,000 restaurants listed without any real affiliation with Grubhub. The FTC alleged that the company used those listings to make its platform appear larger and more attractive than it actually was.

Additionally, Grubhub sometimes refused to remove restaurants after they requested to be taken off the platform. Business owners faced obstacles in disengaging from a service they had not authorized.

In some cases, the company attempted to convince those businesses to sign paid partnerships to keep their listings active, according to the complaint. This tactic was considered a form of undue commercial pressure by prosecutors.

The combination of these practices led regulators to demand structural changes in Grubhub's operations. The settlement includes not only financial compensations but also future transparency obligations.

The Terms of the Settlement and Required Changes

The $23.8 million agreement included specific requirements to modify Grubhub's operations in several key areas. The company must adjust its internal policies to avoid repeating the sanctioned behaviors.

The company must be more precise when advertising the potential earnings of delivery drivers, avoiding statements that could be misleading. Recruitment ads must be based on verifiable data of actual earnings.

It must also provide customers with a way to challenge account restrictions that prevent them from accessing their accounts or withdrawing their funds. This mechanism must be accessible and resolved within reasonable timeframes according to the agreement.

Another important condition of the agreement is that Grubhub must obtain the express consent of a restaurant before listing it on its platform. The inclusion of businesses without authorization is definitively prohibited.

These changes aim to correct practices that the FTC deemed deceptive and harmful to consumers and delivery workers. The agency will monitor compliance over the coming years.

The announcement of this fund distribution once again highlights Grubhub's treatment of its delivery drivers and customers across the United States. The company has not issued any additional public comments regarding the payment process.

A Broader Context in the Delivery Industry

The Grubhub case is not an isolated incident in the food delivery sector in the United States, which has faced increasing regulatory scrutiny. Several platforms have been the subject of investigations for similar practices in recent years.

Just a month before this announcement, a federal judge approved another settlement for nearly $25 million involving about 60,000 Grubhub delivery drivers in California. That state litigation focused on labor compensation and reflects the legal pressure the company faces in multiple jurisdictions.

Other delivery platforms have also faced criticism and legal challenges in recent years for their practices with drivers and restaurants. The fierce competition in the sector has created incentives to aggressively expand catalogs.

DoorDash has faced legal challenges related to compensation for its drivers, according to public reports on the industry. Workers from digital platforms have organized protests and class-action lawsuits seeking better conditions.

Uber Eats has dealt with accusations involving charges to customers and its relationships with partner restaurants. These disputes reflect deeper tensions regarding commissions and treatment of local businesses.

The on-demand delivery industry remains under the scrutiny of state and federal regulators, which could lead to more settlements and changes in the future. The Grubhub case serves as a precedent for other platforms operating with similar models.

Affected consumers and delivery drivers now hope that payments will arrive without further complications. The FTC has assured that the distribution process will be completed in the coming weeks for most beneficiaries.