Hidden costs, broken promises: Grubhub settles $25 million lawsuit over deceptive practices.
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Grubhub, a go-to for food delivery across the country, has landed in serious trouble—and it’s not just about late deliveries or missed orders. Behind the scenes, startling claims have surfaced about misleading fees, empty promises, and shady business tactics.
If you’ve ever felt like your delivery bill was a little higher than expected, or wondered if drivers were really getting their fair share, you’re not alone. This latest settlement exposes secrets that might change the way you view food delivery forever.
The $25 million settlement isn't just a slap on the wrist—it's a spotlight on practices that many diners, drivers, and even restaurants may not have realized were happening.
So, what exactly went wrong? From surprise fees to promises that fell flat, the details behind this case reveal how convenience can sometimes come at an unexpected cost.
Investigators discovered that Grubhub’s service fees were presented in ways designed to confuse and mislead diners. Internal emails even described these tactics as eroding trust.
For diners, this often meant the advertised cost of a meal ballooned by checkout, with unexpected fees doubling the final bill.
For drivers, the promises of competitive hourly pay turned out to be empty, leaving many with disappointing paychecks.
Even local restaurants—the heart and soul of the food delivery experience—weren’t spared.
Grubhub listed some eateries on their platform without permission, misleading customers and potentially harming the reputation of these establishments.
FTC Chair Lina M. Khan spoke bluntly about the matter: “Grubhub tricked its customers, deceived its drivers, and unfairly damaged the reputation of restaurants.” She made it clear that gig platforms are not exempt from following the law.
Interestingly, while Grubhub has agreed to the settlement, it continues to deny the allegations.
The original lawsuit sought $140 million in penalties, but the agencies settled for $25 million—an amount they deemed realistic based on Grubhub's financial position.
If you enjoy food delivery services, take an extra moment to review your receipts and ensure you're not overpaying for convenience.
And if you’re passionate about supporting your local community, consider ordering directly from restaurants whenever possible. Doing so ensures that your favorite neighborhood eateries reap the full benefits of your patronage.
As Grubhub prepares for its sale to Wonder Group, the spotlight on its practices serves as a cautionary tale for the industry. Transparency isn’t just good business—it’s the law.
We’d love to hear from you! Have you ever been hit with surprise fees or felt misled by food delivery apps? What steps do you take to make sure you’re getting the best deal while still supporting your favorite local restaurants? Share your tips and experiences in the comments below!
If you’ve ever felt like your delivery bill was a little higher than expected, or wondered if drivers were really getting their fair share, you’re not alone. This latest settlement exposes secrets that might change the way you view food delivery forever.
The $25 million settlement isn't just a slap on the wrist—it's a spotlight on practices that many diners, drivers, and even restaurants may not have realized were happening.
So, what exactly went wrong? From surprise fees to promises that fell flat, the details behind this case reveal how convenience can sometimes come at an unexpected cost.
Grubhub Settles for $25 Million Amid Claims of Misleading Fees and Driver Pay Scandals. Image Source: GRUBHUB.
What Did Grubhub Do Wrong?
The allegations, brought forward by the Federal Trade Commission (FTC) and the Illinois Attorney General's office, paint a troubling picture.Investigators discovered that Grubhub’s service fees were presented in ways designed to confuse and mislead diners. Internal emails even described these tactics as eroding trust.
For diners, this often meant the advertised cost of a meal ballooned by checkout, with unexpected fees doubling the final bill.
For drivers, the promises of competitive hourly pay turned out to be empty, leaving many with disappointing paychecks.
Grubhub's Hidden Costs Leave Customers Paying More Than Expected. Image Source: Pexels / Mikhail Nilov.
Even local restaurants—the heart and soul of the food delivery experience—weren’t spared.
Grubhub listed some eateries on their platform without permission, misleading customers and potentially harming the reputation of these establishments.
The $25 Million Settlement
This settlement isn’t just a fine—it’s a stern warning to the entire gig economy. Grubhub must now make sweeping changes, including:- Fully disclosing delivery costs to consumers.
- Advertising honest and accurate pay rates to drivers.
- Listing only restaurants that have given explicit consent.
Interestingly, while Grubhub has agreed to the settlement, it continues to deny the allegations.
The original lawsuit sought $140 million in penalties, but the agencies settled for $25 million—an amount they deemed realistic based on Grubhub's financial position.
What This Means for You
For our GrayVine readers, this case is a timely reminder to always read the fine print and question deals that seem too good to be true.If you enjoy food delivery services, take an extra moment to review your receipts and ensure you're not overpaying for convenience.
And if you’re passionate about supporting your local community, consider ordering directly from restaurants whenever possible. Doing so ensures that your favorite neighborhood eateries reap the full benefits of your patronage.
As Grubhub prepares for its sale to Wonder Group, the spotlight on its practices serves as a cautionary tale for the industry. Transparency isn’t just good business—it’s the law.
We’d love to hear from you! Have you ever been hit with surprise fees or felt misled by food delivery apps? What steps do you take to make sure you’re getting the best deal while still supporting your favorite local restaurants? Share your tips and experiences in the comments below!
