Grubhub Lawsuit: The $25 Million FTC Settlement

What Grubhub Did

In December 2024, the Federal Trade Commission and the Illinois attorney general took action against the food-delivery company Grubhub, alleging it harmed diners, drivers and restaurants alike. According to the complaint, Grubhub hid the true cost of orders by tacking on junk fees — labeled things like “service” and “small order” fees — after showing a lower price; listed roughly 325,000 restaurants on its platform without their permission (and sometimes refused to remove them, instead pitching paid partnerships); and lured drivers with inflated earnings claims, advertising that drivers could make around $26 an hour when the median was closer to $11. It was also faulted for blocking accounts while holding customers’ funds.

In other words, the FTC said Grubhub misled every side of its marketplace.

The Settlement

Grubhub agreed to a $25 million settlement (the FTC initially sought $140 million, but reduced it after Grubhub said it could not pay the full amount), with roughly $23.8 million going to compensate affected diners and drivers. It also agreed to significant reforms: stop adding surprise fees, stop listing restaurants without consent, be transparent about what drivers actually earn, notify customers when accounts are blocked, and provide an easy way to cancel memberships. The case fit a broader federal push against hidden fees across the economy.

The reforms — honest fees, real driver-pay disclosures and consented listings — are the durable result.

What Consumers Should Know

On any delivery app, look at the all-in total — base price plus service, delivery and small-order fees, plus tip — rather than the headline item prices, since fees can add up quickly. If you drive for a delivery platform, be skeptical of advertised ‘up to’ hourly earnings, which often reflect only top performers. And if a service makes canceling a membership hard, that is exactly the practice regulators are now targeting.