Grubhub to pay $25M settlement for deceiving customers, restaurants

Driving the news: The complaint alleges that Grubhub deceived users about delivery costs, deceived workers about how much they would make and listed up to 325,000 restaurants on its platform without permission.

• The complaint says Grubhub hid the true cost of its services and tacked on junk fees, often called "service fees" and "small order fees," making the price much higher than originally advertised.
• Grubhub also advertised inflated hourly pay rates. blocked customers from accessing their accounts and delayed removing restaurants placed onto the platform without their permission, according to the complaint.

By the numbers: Grubhub was initially ordered to pay $140 million, but it was partially suspended when the company said it could not pay the full amount.

• The FTC said the full judgment will be due if Grubhub is found to have "misrepresented its financial status."
• The $25 million will be mainly used for customer refunds.

What's next: The settlement requires Grubhub to make changes to its business practices, including not adding surprise fees to delivery totals, providing a simple way to cancel Grubhub+ subscriptions, stopping listing unaffiliated restaurants and not making misleading driver-earning claims.

• In a statement on its website, the company denied the allegations listed in the complaint and stated that "settling this matter is in the best interest of Grubhub and allows us to move forward."

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