Grubhub settles deceptive practices case with Illinois, US

SPRINGFIELD, Illinois: Grubhub will pay US$25 million to settle claims of deceptive business practices following an investigation by Illinois Attorney General Kwame Raoul and the Federal Trade Commission (FTC).

The settlement resolves allegations that Grubhub misled customers about delivery costs and subscription benefits, deceived drivers about potential earnings, and listed restaurants on its platform without consent. "Grubhub tricked its customers, deceived its drivers, and unfairly damaged the reputation of restaurants," said FTC Chair Lina M. Khan.

The Chicago-based company agreed to pay $24.8 million in restitution, with $200,000 allocated for consumer education and enforcement operations in Illinois.

In a statement, Grubhub denied the allegations but emphasized its commitment to transparency. "While we categorically deny the allegations made by the FTC, we believe settling this matter is in the best interest of Grubhub and allows us to move forward," the company said.

Attorney General Raoul confirmed that Grubhub will change its platform to clarify fees and better explain driver earnings. It will also remove unauthorized restaurant listings.

The FTC will determine how to distribute restitution to affected consumers after court approval of the settlement.

According to Wikipedia, as of 2019, Grubhub had 19.9 million active users, with 115,000 associated restaurants in 3,200 cities in all 50 U.S. states.