FTC Grubhub Settlement: $23.8 Million Payout and What It Means for the Food Delivery Industry

In August 2026, the Federal Trade Commission began distributing more than $23.8 million to 640,038 Grubhub drivers and diners — the culmination of a landmark enforcement case against the food delivery platform . The payouts stem from a December 2024 settlement in which Grubhub agreed to pay $25 million to resolve charges that it engaged in a broad range of deceptive and unlawful practices harming consumers, workers, and small businesses . Here is what the FTC alleged, who is receiving money, what Grubhub must change, and why this case signals broader scrutiny for the entire food delivery industry.

The Allegations: Deceptive Earnings, Hidden Fees, and Banned Practices

The complaint, filed jointly by the FTC and the Illinois Attorney General, accused Grubhub of five main categories of misconduct:

• Misleading driver earnings claims: Grubhub allegedly made unsubstantiated claims about how much delivery drivers could earn. The FTC stated that these representations were not backed by accurate data .
• Hidden and misleading delivery costs: The company was accused of deceiving diners about the true cost of delivery, including tacking on junk fees such as "service" and "small order" fees after customers had selected items — a practice the FTC described as a "pricing shell game" .
• Unauthorized restaurant listings: Grubhub allegedly added thousands of restaurants to its platform without their knowledge or consent, and in some cases created websites for those restaurants without authorization. The complaint noted that up to 325,000 restaurants may have been listed without permission, artificially inflating Grubhub's platform size .
• Blocking consumer account access: The company was accused of denying consumers access to their Grubhub accounts and the funds held in them — including gift card balances — when they tried to resolve disputes .
• Violations of federal law: The complaint alleged violations of the Restore Online Shoppers' Confidence Act (ROSCA) and the FTC's Impersonation of Government rule .

Who Gets Paid and How

The FTC is sending 640,038 payments totaling more than $23.8 million . Here is how the distribution works:

• Recipients: Drivers harmed by deceptive earnings claims and diners harmed by misleading or unlawful conduct .
• Payment method: Most recipients will receive a check by mail; some will receive payments via PayPal .
• Deadlines: Checks must be cashed within 90 days, and PayPal payments must be accepted within 30 days. If a payment is not claimed in time it is forfeited .
• No claim required: The FTC identified affected consumers through its own records, so no separate claim or application was needed .
• Total settlement: $25 million, of which the $23.8 million is consumer redress. The remainder covers administrative costs and other settlement components .

Required Operational Changes

Under the settlement order, Grubhub must make substantial changes to how it operates :

• Stop misrepresenting costs and earnings: Cease deceptive claims about delivery costs, driver earnings, and the status of restaurant listings.
• Obtain express consent: Before listing any restaurant on its platform going forward, Grubhub must get the restaurant's permission.
• Make truthful earnings claims: Any statements about driver pay must be based on accurate data.
• Provide clear upfront disclosures: Consumers must see the full delivery cost at the time they place an order.
• Comply with ROSCA and FTC rules: Ensure simple cancellation mechanisms and lawful account access.

The FTC's Ferguson statement described the order as prohibiting "a wide range of misconduct" and imposing injunctive relief to prevent recurrence . Grubhub, while agreeing to the settlement, categorically denied the allegations, stating they were "wrong, misleading or no longer applicable" to its business .

What This Means for the Food Delivery Industry

The Grubhub settlement is not an isolated case. It is part of a broader regulatory crackdown on the food delivery sector :

• Industry-wide rulemaking: In April 2026, the FTC launched an Advance Notice of Proposed Rulemaking (ANPRM) seeking public comment on whether a new federal rule is needed to address unfair and deceptive fee practices across online food and grocery delivery platforms. The notice explicitly named undisclosed fees, menu price markups, and misleading "free delivery" claims — the same types of practices found at DoorDash, Uber Eats, and other competitors .
• Precedent for enforcement: The Grubhub case represents one of the largest FTC enforcement actions specifically targeting the food delivery sector, and the agency is now using it as a foundation for broader rulemaking to govern the entire industry .
• State-level action: The Illinois Attorney General's co-lead role signals that state attorneys general are actively policing gig-economy and delivery platform practices, and similar actions against other platforms are plausible.

The settlement and the ANPRM together suggest that regulators view hidden fees, deceptive earnings claims, and unauthorized restaurant listings as systemic problems across the delivery industry — not just at one company.