Grubhub has it Agreed to pay $25 million To settle a Federal Trade Commission lawsuit that claimed the food delivery service misled customers and drivers, while also damaging the restaurants' reputations. proposed settlement Grubhub will need to make several changes to the platform, such as showing the total delivery cost when customers place an order.
Advertisement as well as “significantly increased hourly pay rates for drivers” FTC's initial complaint Grubhub was accused of hiding “the true cost of its services” by adding delivery fees, thereby increasing the price of customers' final orders. The agency claimed that starting around 2019, Grubhub began advertising lower delivery fees to attract more customers, but then began tacking on “service” fees, increasing the cost of orders.
The FTC also alleged that the company charged Grubhub Plus members for delivery, despite advertising the membership as “free” or “$0” delivery. Agency claims Grubhub plans It's easy to sign up for but hard to cancel While accounts of users with reportedly large gift card balances have also been blocked.
Additionally, the FTC charged Grubhub Adding restaurants to the platform Even if they never signed up to sell food on the service. The FTC claims, “Grubhub has approximately 325,000 unaffiliated restaurants on its platform – more than half of all restaurants available on Grubhub.” As a result, many customers had problems with their orders, resulting in poor feedback for unaffiliated restaurants.
Grubhub is now required to show customers the full cost of delivery and can no longer add “junk fees” to orders. It is also prohibited from listing unaffiliated restaurants on the platform, and can only claim a driver's earnings “that can be supported by evidence and in writing.” Grubhub should notify customers when they are banned and provide a way to appeal the decision, as well as make it easier to cancel Grubhub Plus.
“While we categorically deny the allegations made by the FTC, many of which are false, misleading or no longer apply to our business, we believe it is in Grubhub's best interests to settle this matter.” and allows us to move forward,” Grubhub spokesperson Nezi Kamal said in a statement. The VergeThe company also responded with agreement In a post on its website,
Although Grubhub was initially ordered to pay $140 million, it has been “partially suspended based on the Company's inability to pay the full amount.” The company's $25 million will be used to refund affected customers, but the FTC says the full judgment will be awarded “immediately” if Grubhub is “found to have misrepresented its financial condition.”