Grubhub to pay $25 million to settle charges it allegedly misled diners and drivers about meal costs and pay
Grubhub will pay $25 million to settle charges it misled customers about the cost of their delivery and drivers about how much they could earn on the food-delivery platform.
Grubhub will pay $25 million to settle charges it misled customers about the cost of their delivery and drivers about how much they could earn on the food-delivery platform.
The Federal Trade Commission and the attorney general for the state of Illinois accused Chicago-based Grubhub of engaging "in an array of unlawful practices" designed to "deceive" diners and workers alike about the cost of doing business on the platform.
The agencies said they had uncovered messages that demonstrated Grubhub's allegedly illicit tactics, including an internal message from a former executive stating that the tactic of adding service fees in a way that was “misleading, eroding trust,” and “truly more expensive” for consumers.
The upshot was often a final price sometimes more than double what it originally advertised to a platform user, the agencies said.
Grubhub also allegedly engaged in false advertising to attract drivers, citing hourly pay rates "well above what drivers could realistically expect to earn," according to a release accompanying the civil complaint.
Rating: 5