The Federal Trade Commission is distributing more than $23.8 million in payments to consumers and delivery drivers harmed by Grubhub’s deceptive practices, the agency announced Aug. 12.
Drivers were harmed by misleading earnings claims, while diners were affected by unlawful and deceptive ordering practices, according to the FTC. The distribution represents the consumer redress phase of the agency’s enforcement action against the food delivery platform, which was previously finalized.
The FTC did not disclose the number of individual recipients or the average payment amount in its announcement. Affected consumers and drivers who are eligible for payments will receive them automatically based on the agency’s distribution plan.
The Grubhub case is part of the FTC’s broader scrutiny of gig economy platforms and their treatment of both workers and consumers. Delivery drivers for app-based platforms have faced persistent complaints about misleading pay structures and opaque algorithms that affect their earnings.
For the millions of Americans who use food delivery apps, the enforcement action sets expectations for industry conduct on pricing transparency and honest advertising. Grubhub operates in thousands of cities across the United States and competes with DoorDash, Uber Eats and other platforms.
The gig economy has grown rapidly in recent years, with an estimated 60 million Americans performing some form of freelance or platform-based work. Federal enforcement actions against major platforms carry outsized significance because they establish conduct standards across the sector.
The FTC’s ability to obtain monetary relief for consumers was bolstered by the agency’s use of its enforcement authority to secure the original settlement.