Grubhub agreed to pay $25 million to solve Charges from the Federal Trade Commission (FTC) and the Illinois Attorney General. The company has been accused of a laundry list of sketchy behavior, including misleading customers about delivery fees, deceiving delivery drivers about income and listing restaurants on the platform without consent. last month, food delivery startup Wonder has acquired Grubhub for a tenth of its cost during a pandemic.

Under the proposed settlement, Grubhub must make changes to address the issues. The demands read like a "stop doing this" list, one for each charge. This includes informing customers of full delivery costs, being honest with drivers about payment, and listing restaurants only with their consent.

The FTC says Grubhub has added up to 325,000 unaffiliated restaurants to the unauthorized platform since at least 2019 to appear more robust than it is. Customers who ordered from those businesses discovered additional fees and "multiple order problems." Meanwhile, the agency says restaurants "have borne the brunt of diners' anger," causing reputational damage and lost money.

The company also allegedly added unnecessary fees to customers after announcing they would pay a low-cost, flat rate for delivery. The FTC says Grubhub labeled them as "service fees" or "small order fees," but they were just delivery fees under another name. The agency quotes a former Grubhub executive as calling it a "price shell game."

The FTC also accused the company of blocking the accounts of customers with large gift card balances and leaving them no way to regain access. The agency said diners who complained to the company were either not told their accounts had been blocked or given no meaningful way to challenge the ban.

Among the false pay claims are advertisements claiming that Grubhub drivers can earn up to $40 an hour in the New York area. In fact, the average driver salary in the area was about $10 an hour — and only 0.1 percent of drivers reportedly made the advertised rate. In Chicago, advertising promised up to $26 an hour, compared to $11 for media.

Grubhub denies Despite the allegations, he says he agreed to put the matter behind him. "At Grubhub, we are committed to transparency so that every day diners, restaurants and drivers can make well-informed choices about doing business with us," the company wrote in a statement. "While we strongly deny the allegations made by the FTC, many of which are false, misleading or no longer relevant to our business, we believe that resolving this matter is in Grubhub's best interests and allows us to move forward."

"Our investigation found that Grubhub defrauded its customers, cheated its drivers, and unfairly harmed the reputation and revenue of restaurants that did not partner with Grubhub — all in order to increase scale and accelerate growth," FTC Chair Lina M. Khan wrote. statement. “Today's action holds Grubhub accountable, ends these illegal practices, and provides nearly $25 million for people who were defrauded by Grubhub's tactics. There is no 'concert platform' exception to the laws on the books."