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Grubhub has agreed to pay $25 million<\/a> to settle a Federal Trade Commission lawsuit that claimed the food delivery service misled customers and drivers while also damaging the reputation of restaurants. The proposed settlement<\/a> will require Grubhub to make several changes to the platform, such as showing the total delivery cost when customers place an order.<\/p>\n<\/div>\n Along with advertising \u201chighly inflated hourly pay rates for drivers,\u201d the FTC\u2019s initial complaint<\/a> accused Grubhub of hiding \u201cthe true cost of its services\u201d by adding delivery fees that raised the price of customers\u2019 final orders. The agency claimed that starting around 2019, Grubhub began advertising lower delivery fees to attract more customers but then began tacking on a \u201cservice\u201d fee that increased the cost of orders anyway.<\/p>\n<\/div>\n The FTC also alleged the company charged Grubhub Plus members for delivery despite advertising the subscription as having \u201cfree\u201d or \u201c$0\u201d deliveries. The agency claimed Grubhub makes the plan easy to sign up for but difficult to cancel<\/a> while also allegedly blocking the accounts of users with large gift card balances.<\/p>\n<\/div>\n Additionally, the FTC accused Grubhub of adding restaurants to the platform<\/a> even if they never signed up to sell food on the service. \u201cGrubhub has had as many as 325,000 unaffiliated restaurants on its platform \u2014 more than half of all of the available restaurants on Grubhub,\u201d the FTC claims. As a result, many customers wound up having issues with their orders, resulting in bad feedback for unaffiliated restaurants.<\/p>\n<\/div>\n Grubhub is now required to show customers the full cost of delivery and can no longer add \u201cjunk fees\u201d to orders. It\u2019s also banned from listing unaffiliated restaurants on the platform, and can only make driver earnings claims \u201cthat it can back up with evidence and in writing.\u201d Grubhub must also notify customers when they\u2019re banned and offer a way to appeal the decision, as well as make it easier to cancel Grubhub Plus.<\/p>\n<\/div>\n \u201cWhile we categorically deny the allegations made by the FTC, many of which are wrong, misleading or no longer applicable to our business, we believe settling this matter is in the best interest of Grubhub and allows us to move forward,\u201d Grubhub spokesperson Najy Kamal said in a statement to The Verge<\/em>. The company also responded to the settlement in a post on its website<\/a>.<\/p>\n<\/div>\n Though Grubhub was initially ordered to pay $140 million, it is \u201cpartially suspended based on the company\u2019s inability to pay the full amount.\u201d The company’s $25 million will go toward refunding affected customers, but the FTC says the full judgment will be due \u201cimmediately\u201d if Grubhub \u201cis found to have misrepresented its financial status.\u201d<\/p>\n<\/div>\n