Grubhub Inc.

The driver earnings claims

Grubhub advertised to recruit delivery drivers using hourly rates far above what drivers could realistically expect.

In the New York area it advertised up to $40 an hour. The actual median pay for drivers there was around $10 an hour, and one driver in a thousand made $40. A Chicago campaign promised up to $26 an hour against a median of $11, with fewer than 2 percent of drivers reaching the advertised figure.

In 2021 Grubhub received a Notice of Penalty Offenses from the FTC warning against deceptive earnings claims. The complaint charges that it continued making them afterwards.

The pricing shell game

The complaint says Grubhub advertised a single low delivery price, then added fees that often more than doubled the final price. The extra charges were labelled “service fees” or “small order fees” but, in the company’s own documents, the service fee was “directly tied to the act of delivering (i.e. it is another form of delivery fee)”, and for accounting the company treated the two as one: “delivery fee + service fee = the restaurant’s delivery fee.”

A former executive called the tactic “misleading, eroding trust” and “truly more expensive” for consumers. Another called the overall approach a “pricing shell game.” Grubhub+ was advertised as “free” or “$0” delivery while subscribers were still charged for delivery, and cancelling it was obstructed.

Blocked accounts

The complaint charges that Grubhub regularly blocked diners’ accounts holding large gift card balances without warning, leaving people with no access to their own money and no meaningful way to contest it. In one month alone, 97 percent of locked accounts were never unlocked.

The restaurants that never agreed

Since at least 2019 Grubhub added unaffiliated restaurants to its platform without permission, at one point as many as 325,000, more than half of all restaurants on Grubhub.

Search results pointed diners to Grubhub instead of the restaurant. With no integration, restaurants were hit with orders from Grubhub drivers, sometimes for food they did not serve, paid with Grubhub cards that were sometimes declined for insufficient funds, leaving them unpaid for food already made. When deliveries were late or poor, diners blamed the restaurant. Restaurants that asked to be removed were offered paid partnerships instead, and often removed only after threatening legal action.

The order

Grubhub must disclose the true cost of delivery, notify and allow appeal of blocked accounts, provide simple cancellation with an annual reminder, stop listing unaffiliated restaurants, and make only substantiated driver earnings claims.

The judgment is $140 million, partially suspended for inability to pay, with $25 million payable, nearly all for consumer refunds. In August 2026 the FTC sent more than $23.8 million to 640,038 drivers and diners.

What is not established

A stipulated final order resolves the allegations without any admission or finding of wrongdoing. Commissioner Ferguson concurred in part and dissented in part, and Commissioner Holyoak dissented as to two counts.