Labor & Employment Law Daily Wrap Up, FTC NEWS—Agency sends more than $23.8 million to drivers, diners allegedly harmed by Grubhub, (Aug 13, 2026)

By Jason Albright, J.D.

The FTC and the Illinois Attorney General had sued Grubhub, alleging that it engaged in an array of unlawful practices, including deceiving drivers about how much money they would be making.

The Federal Trade Commission announced yesterday that it is sending payments totaling more than $23.8 million to drivers harmed by Grubhub’s allegedly deceptive earnings claims and to diners harmed by the app-based food delivery company’s allegedly misleading and unlawful conduct. The payments result from settlement of a lawsuit brought by the agency and the Illinois Attorney General alleging that the food delivery company engaged in an array of unlawful practices including deceiving drivers about how much money they would make delivering food, blocking diners from their accounts and funds, and unfairly and deceptively listing restaurants on its platform without the restaurants’ permission.

Settlement. Under the terms of the settlement, reached in October 2024, Grubhub must make substantial changes to its operations, including telling consumers the full cost of delivery, honestly advertising pay for drivers, and listing restaurants on its platform only with their consent.

The investigation. “Our investigation found that Grubhub tricked its customers, deceived its drivers, and unfairly damaged the reputation and revenues of restaurants that did not partner with Grubhub—all in order to drive scale and accelerate growth,” said then-FTC Chair Lina M. Khan following the settlement. “Today’s action holds Grubhub to account, putting an end to these illegal practices and securing nearly $25 million for the people cheated by Grubhub’s tactics. There is no ‘gig platform’ exemption to the laws on the books.”

“This settlement is the culmination of a multi-year investigation into deceptive and illegal business practices perpetrated by Grubhub,” added Illinois Attorney General Kwame Raoul. “I thank FTC Chair Lina Khan for another successful partnership between our offices that has resulted in relief for Illinois consumers, and I remain committed to holding businesses like Grubhub accountable for their deceptive business practices.”

Deceiving drivers. The complaint charged that Grubhub relied on deceptive earnings claims in advertisements designed to recruit its delivery drivers. Its ads allegedly used highly inflated hourly pay rates, well above what drivers could realistically expect to earn.

The complaint, for example, cited ads in the New York area claiming drivers could make up to $40/hour, though the actual median pay for drivers in the area was around $10/hour, and only one in 1,000 drivers made $40/hour. Similarly, an ad campaign in Chicago promised earnings of up to $26/hour, though the median was only $11/hour, and less than 2 percent of drivers made the advertised amount.

Previously warned. In 2021, according to the FTC, Grubhub, along with hundreds of other companies, received a Notice of Penalty Offenses from the agency warning against making deceptive earnings claims, but the complaint charged that Grubhub continued making those claims after receiving the notice.

Payments by check and PayPal. The FTC indicated that it is “sending checks or PayPal payments to 640,038 affected consumers. Most consumers will receive a check in the mail. Check recipients should cash their checks within 90 days, as indicated on the check. PayPal recipients should redeem their PayPal payments within 30 days.”

The agency urges consumers who have questions about their payment to contact its refund administrator, Analytics Consulting LLC, at 1-888-446-4992, or visit the FTC website to view frequently asked questions about the redress process. “The Commission never requires people to pay money or provide account information to get a payment,” it noted.

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