Consumers will share most of the money
of ConsumerAffairsGrubhub Inc. has agreed to a $25 million settlement following allegations of deceptive business practices that adversely affected customers, delivery drivers, and restaurants.
Illinois Attorney General Kwame Raoul announced the settlement, along with the Federal Trade Commission, marking the conclusion of an investigation into the company's operations.
Raoul's office initiated the probe after receiving numerous consumer complaints about Grubhub's practices. Working alongside the FTC, the investigation found that Grubhub engaged in misleading activities across various facets of its business.
These included misrepresenting delivery costs and the benefits of its Grubhub Plus subscription, providing inaccurate earnings information to drivers and listing restaurants on its platform without their consent.
'Multi-year investigation'
"This settlement is the culmination of a multi-year investigation into deceptive and illegal business practices perpetrated by Grubhub," Raoul said.
Raounl expressed gratitude to FTC Chair Lina Khan for the successful partnership that led to consumer relief in Illinois, emphasizing his commitment to holding businesses accountable for such practices.
"Grubhub tricked its customers, deceived its drivers, and unfairly damaged the reputation and revenues of restaurants that did not partner with Grubhuball in order to drive scale and accelerate growth," Khan said.
She added that the settlement not only holds Grubhub accountable but also secures nearly $25 million for those affected by the company's tactics.
What consumers may get
As part of the settlement, Grubhub will pay $24.8 million in restitution to consumers nationwide who were harmed by its deceptive practices. An additional $200,000 will support the Illinois Attorney General's consumer education and enforcement efforts.
To prevent future occurrences of such practices, the settlement mandates that Grubhub must:
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Clearly disclose all fees associated with delivery and the total cost to consumers upfront.
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Provide verifiable proof of any potential earnings claims made to drivers upon request.
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Immediately remove any unaffiliated restaurants from its platform.
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Stop adding restaurants without explicit permission.
Raoul said the settlement represents a significant step in ensuring transparency and fairness in the operations of gig economy platforms, reinforcing that no company is exempt from adhering to established legal standards.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-12-18 15:58:41
