Grubhub pays $25 million for allegedly tricking customers and lying to drivers
Grubhub has Agree to pay $25 million Settles Federal Trade Commission lawsuit claiming food delivery services misled customers and drivers while also damaging restaurants’ reputations. this proposed settlement Grubhub will be required to make several changes to the platform, such as displaying the total delivery cost when customers place an order.
In addition to promoting “driver hourly wages are too high”, FTC’s preliminary complaint Grubhub is accused of hiding “the true cost of its services” by adding delivery fees, thus increasing the price of customers’ final orders. The agency alleges that starting around 2019, Grubhub began advertising lower delivery fees to attract more customers, but then began charging “service” fees, which anyway increased the cost of orders.
The FTC also accused the company of charging delivery fees to Grubhub Plus members even though the subscription was advertised as “free” or “$0” delivery. Agency claims Grubhub created the plan Easy to register but hard to cancel It also allegedly blocks the accounts of users with large gift card balances.
Additionally, the FTC charged Grubhub with Add restaurants to the platform Even if they never signed up to sell food on the service. The FTC claims: “There are as many as 325,000 unaffiliated restaurants on the Grubhub platform, accounting for more than half of all restaurants available on Grubhub.” As a result, many customers had problems with their orders, resulting in unaffiliated restaurants receiving poor feedback.
Grubhub is now required to show customers the full cost of delivery and can no longer add a “junk fee” to orders. It is also prohibited from listing non-affiliated restaurants on the platform and can only provide “evidence and written support” for drivers’ earnings. Grubhub must also notify customers when they are banned and provide a way to appeal the decision and make it easier to cancel Grubhub Plus.
Grubhub spokesperson Najy said: “While we categorically deny the allegations made by the FTC, many of which are false, misleading or no longer apply to our business, we believe it is in Grubhub’s best interest to resolve this matter and enable We can move on. edge. The company also responded to the settlement In a post on its website.
Although Grubhub was initially ordered to pay $140 million, “the project has been partially suspended due to the company’s inability to pay the full amount.” The company’s $25 million will be used to refund affected customers, but the FTC said it would issue a full judgment “immediately” if Grubhub is “found to have misrepresented its financial condition.”
2024-12-17 23:03:34