Grubhub, one of the largest food delivery platforms in the United States, is facing multiple lawsuits and settlements stemming from allegations of deceptive business practices. The company has agreed to pay at least $25 million to resolve a Federal Trade Commission (FTC) and Illinois Attorney General settlement, along with millions more in other class action settlements, after being accused of inflating customer fees, deceiving users about subscription benefits, and misrepresenting driver earnings to job applicants. These legal actions represent a significant reckoning for a company that fundamentally changed how Americans order food, revealing systemic issues in how the platform charged customers and attracted workers.
Between late 2024 and early 2026, Grubhub agreed to settle multiple separate cases involving different wrongful practices. The lawsuits reveal a pattern: customers who thought they were seeing the full price of their meals discovered that delivery fees, service charges, and other costs could more than double the advertised restaurant price. At the same time, restaurant owners sued after their establishments were listed on the platform without permission, and would-be drivers found that promised hourly earnings were far above what they actually earned in practice.
Table of Contents
- What Were the Main Accusations in the Grubhub Lawsuits?
- The FTC Settlement and What It Means
- California Class Action Settlement for Customers
- Restaurant Unauthorized Listing Settlement
- How the Fee Structure Deceived Customers
- Driver Earnings Misrepresentation
- What Changed After the Settlements
- Conclusion
What Were the Main Accusations in the Grubhub Lawsuits?
The FTC’s case against Grubhub centered on three core deceptive practices. First, the company charged service fees to customers that could more than double advertised menu prices, often presenting the advertised price prominently while burying true costs in smaller text or requiring customers to enter their address before seeing the full bill. Second, Grubhub’s subscription service, Grubhub+, promised free delivery for subscribers but still charged delivery fees on many orders, creating confusion about what the membership actually covered. Third, the company advertised driver earnings of up to $40 per hour in its recruitment materials, while the median actual earnings for drivers were only $11 per hour—with only the top 2% of drivers achieving the advertised rate. These practices had real financial consequences for different groups.
A customer ordering a $15 lunch could end up paying $30 or more once Grubhub’s service fee, delivery charge, and small-order fees were applied. Restaurant owners discovered their businesses listed on the platform without permission, unable to control menu items, pricing, or even whether they wanted to participate in delivery at all. Workers attracted by promises of $40-per-hour earnings quickly found themselves making a fraction of that amount after accounting for platform fees, vehicle costs, and actual delivery times. The lawsuits revealed that Grubhub had systematically used dark patterns and misleading information across its platform. The company delayed revealing full pricing until the final steps of checkout, made canceling the Grubhub+ subscription deliberately difficult, and used driver testimonials and earnings claims that didn’t represent the typical experience of most workers on the platform.
The FTC Settlement and What It Means
In December 2024, the FTC and Illinois Attorney General announced a settlement requiring Grubhub to pay at least $25 million in civil penalties. The original settlement figure was $140 million, but regulators agreed to reduce the amount because Grubhub claimed it couldn’t pay the full sum—an important limitation to understand about government settlements. Even with the reduction, it represents one of the larger penalties the FTC has imposed on a gig economy company, signaling serious concern about deceptive practices in the food delivery industry.
The settlement requires Grubhub to make substantial operational changes. The company must clearly disclose all fees before customers commit to an order, prominently display total pricing early in the checkout process, and make subscription cancellation straightforward and quick. Additionally, Grubhub is prohibited from misrepresenting driver earnings in recruitment materials going forward. However, one limitation of regulatory settlements is that they primarily constrain future behavior rather than fully compensating past victims—the $25 million in penalties goes to the government and states, not directly to affected customers, though some funds may support consumer education initiatives.
California Class Action Settlement for Customers
A separate class action lawsuit, Wang et al. v. Grubhub, resulted in a $5 million settlement exclusively for California customers. This settlement covers anyone who placed at least one order on Grubhub between January 2019 and January 2026, which potentially includes millions of people. Rather than cash, eligible class members receive a $10 Grubhub credit that can be used toward future orders or, in some cases, converted to account credit.
The key deadline for this settlement is May 12, 2026—class members must submit claims by this date to receive their compensation. If the total value of approved claims exceeds $5 million, each credit is reduced proportionally. The settlement also includes attorney fees of up to $1,000,000 for the lawyers who brought the case, paid separately by Grubhub and not deducted from the customer compensation fund. This means the full $5 million remains available for class members. One important caveat: if many California customers submit claims, each $10 credit could be reduced, so the actual value received depends on claim participation rates.
Restaurant Unauthorized Listing Settlement
Beyond consumer-focused lawsuits, Grubhub settled a separate case involving restaurant owners who had been listed on the platform without authorization. The settlement reached $7.15 million to address both the unauthorized listings and related California delivery-fee claims. This settlement highlights a less-publicized aspect of Grubhub’s business model: restaurants had no choice about whether they wanted to be on the platform and had limited control over how their food was presented or priced.
Restaurant owners reported discovering their businesses on Grubhub for the first time when customers called to ask why menu prices differed from what appeared on the platform. Grubhub sometimes listed restaurants without current information, outdated menus, or partnerships these restaurants never agreed to. This practice gave restaurants no ability to control their online reputation or customer experience through Grubhub’s service, while Grubhub profited from the transaction fees and delivery markups. The settlement required Grubhub to implement better authorization processes and compensate affected restaurant owners, though the $7.15 million is divided among potentially thousands of restaurants that were listed without permission.
How the Fee Structure Deceived Customers
Grubhub’s fee structure was designed in a way that masked true costs from customers until late in the ordering process. A restaurant might advertise a $12 entrée, but by checkout, customers faced a service fee (sometimes 15-20% or more), delivery fee ($2-$8 depending on location and restaurant), small-order fees, and occasionally surge pricing during busy times. The cumulative effect meant a meal advertised at $30 could cost $50 or more, representing a 67% markup or higher.
One critical limitation to understand about settlement compensation: the $10 credit in the California class action doesn’t compensate the full amount that customers may have overpaid across potentially hundreds of orders. For someone who placed orders regularly between 2019 and 2026, the credit represents a fraction of the excess fees they paid. The settlements also don’t address the primary harm that occurred—customers already paid these inflated prices and used the service during the violation period. The settlements provide some recompense and establish new rules, but don’t fully restore what customers spent on hidden charges.
Driver Earnings Misrepresentation
Grubhub’s recruitment materials promised potential driver earnings of up to $40 per hour, a figure that appeared in job listings, advertisements, and driver recruitment campaigns. However, the median actual earnings for Grubhub drivers were $11 per hour once you accounted for vehicle maintenance, gas, insurance, and platform fees. Only the top 2% of drivers—those working during peak hours in high-demand areas with exceptional speed and customer ratings—approached the advertised $40-per-hour figure.
This misrepresentation attracted thousands of workers who expected to earn meaningful income but found the actual opportunity far less lucrative. The FTC settlement required Grubhub to change its recruitment practices and stop using misleading earnings claims going forward. However, past drivers have limited recourse through this settlement; the FTC’s action focuses on preventing future deception rather than compensating the workers who were misled into accepting lower-paid positions based on false earnings expectations.
What Changed After the Settlements
Following these settlements and regulatory action, Grubhub has made operational changes that affect how the platform operates. The company now displays total costs earlier in the checkout process, makes subscription cancellation simpler, and uses more cautious language about driver earnings in recruitment materials.
These changes affect both new users and the platform’s existing customer base. Going forward, these settlements send a message to other food delivery companies—DoorDash, Uber Eats, and others—that deceptive fee practices, unauthorized restaurant listings, and misleading worker recruitment are subject to regulatory scrutiny and lawsuits. Whether competitors implement similar transparency measures remains to be seen, but the Grubhub case establishes a legal precedent that platform companies cannot simply bury fees, make cancellation difficult, or misrepresent earnings without facing consequences.
Conclusion
The Grubhub lawsuits and settlements represent a significant moment in the regulation of gig economy platforms and food delivery services. Across multiple cases, the company agreed to pay tens of millions in penalties and customer compensation due to deceptive practices that affected diners, restaurant owners, and delivery workers. The December 2024 FTC settlement, the $5 million California class action, and the $7.15 million restaurant authorization settlement collectively demonstrate that regulators and courts will hold major platforms accountable for misleading pricing, cancellation practices, and false earnings claims.
If you placed orders on Grubhub in California between January 2019 and January 2026, you have until May 12, 2026 to claim your $10 credit through the settlement website at ghdeliveryfeesettlement.com. Whether you’re a current Grubhub user or considering alternatives, understanding these settlements helps clarify what hidden costs to expect and what the platform must disclose. The cases also underscore the importance of reading terms carefully, checking total pricing before confirming orders, and being skeptical of earnings claims in gig economy recruitment—lessons that apply across multiple platforms in the growing delivery economy.