Grubhub's $25 Million Lesson: No More Hidden Fees

Grubhub has agreed to pay a hefty $25 million to settle a lawsuit with the Federal Trade Commission (FTC). The food delivery giant was accused of tricking customers and drivers, while also damaging the reputation of restaurants. So, what exactly did Grubhub do wrong? First off, they were hiding the true cost of deliveries. Grubhub advertised lower delivery fees to attract more customers, but then sneakily added a "service" fee that boosted the order cost. Talk about a bait and switch! Next, they were lying about their Grubhub Plus subscription. Despite advertising "free" or "$0" deliveries, the company was still charging members for deliveries. Plus, they made it easy to sign up but tough to cancel. Not cool, Grubhub.

And get this—Grubhub was adding restaurants to their platform without their consent. Up to 325, 000 unaffiliated restaurants were listed, leading to order issues and bad feedback for those restaurants. As part of the settlement, Grubhub has to show the full delivery cost upfront, stop adding hidden fees, and only list restaurants that have signed up. They also have to make it easier to cancel their Plus subscription and notify customers if they're banned. Grubhub's spokesperson said they deny many of the allegations but settled to move forward. Let's hope this teaches them—and other companies—a lesson about being honest with customers.

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