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Grubhub will pay $25 million to settle charges it misled customers about the cost of their delivery and drivers about how much they could earn on the food-delivery platform.
"The drivers as a general matter cannot engage in personal non-work activities during their GrubHub shifts," the complaint states, meaning that they essentially function as employees. They also allege that they do not receive the same benefits that an employee does. Grubhub drivers are allegedly required to pay some of their expenses. [64]
Grubhub, one of the most prolific third-party delivery companies, was just raked over the coals by the Federal Trade Commission in a lawsuit for misleading customers about the cost of delivery ...
The settlement requires Grubhub to cease the practices and pay $25 million. The agencies sought a $140 million judgment against the company, but reduced it to what Grubhub is able to pay, they said.
The legality of ridesharing companies by jurisdiction varies; in some areas they are considered to be illegal taxi operations, while in other areas, they are subject to regulations that can include requirements for driver background checks, fares, caps on the number of drivers in an area, insurance, licensing, and minimum wage.
In 2020, three delivery drivers sued EatStreet for wage theft, accusing EatStreet of failing to reimburse mileage expenses and using tips to meet minimum wage requirements. [15] EatStreet agreed to a $1.2 million settlement, but later in December reported that it would not be able to honor its settlement offer due to financial circumstances. [16]
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