THE BAIT-AND-SWITCH AT CHECKOUT

Your late-night search for food begins. You open Grubhub, find a local spot, and see a reasonable “$2.49 delivery” fee. You build your order, you get to the cart, and the fee is still there. But when you hit the final checkout page, the total suddenly jumps. This is by design. According to a lawsuit filed by the Federal Trade Commission and the Illinois Attorney General, Grubhub engages in a systematic bait-and-switch to hide the true cost of its service.

The company advertises one price for delivery but saddles you with undisclosed fees for the exact same service once you’re locked into the ordering process. These charges, buried under vague labels like “service fee” and “small order fee,” can easily double the cost you thought you were paying. Internally, Grubhub treats these fees as part of the delivery cost. For accounting purposes, the company states that the “delivery fee + service fee = the restaurant’s delivery fee.” They just split the total cost into a low, attractive number and a hidden, mandatory one.

This tactic was deliberately implemented around 2019 to lure in more customers. Grubhub’s own market research confirmed that the advertised delivery fee is the primary “pain point” for diners. By artificially lowering it and hiding the rest until the last second, they saw a “MASSIVE increase for diner productivity,” according to a former executive.

“to identify what the delivery fee is, I will typically choose a restaurant, add a random item to the bag, go to the checkout page to see what the fee is… this process is BEYOND frustrating.”

The company knew what it was doing. One diner, who was also a shareholder, complained directly to Grubhub that figuring out the real price was “laborious” and took upwards of 45 minutes of clicking back and forth. This frustration is a calculated part of the business model.

THE “FREE DELIVERY” SUBSCRIPTION TRAP

To “lock in” customers, Grubhub heavily promotes its $9.99/month Grubhub+ subscription with the promise of “unlimited free delivery.” This is false. Subscribers are still hit with the same hidden “service fees” and “small order fees.” Furthermore, the “free” delivery only applies to a select group of restaurants that participate in the program, a limitation Grubhub conveniently conceals in its marketing. As of August 2021, only 60% of restaurants on the platform were even eligible.

Customers sign up based on a deceptive promise and are often surprised to find their “free” delivery orders still cost them several extra dollars in fees. When they realize the deal isn’t what was advertised, canceling is another nightmare. The lawsuit details how Grubhub makes enrollment a one-click process while burying the cancellation option behind a maze of pages and menus. This deliberate friction is designed to keep you subscribed and paying, whether you want to or not.

“So grub hub just changed the name of the delivery fee? Why exactly am I paying for seamless plus then?”

Grubhub’s own customer service analyses from 2020 acknowledged that subscribers were unaware of the “restrictions of the free delivery benefit.” A then-Senior Vice President of Growth admitted that the practice of charging fees on a supposedly “free” service “[f]eels bad.” It feels bad because it is a lie designed to extract wealth from people who trusted the marketing.

THE NON-FINANCIAL LEDGER

The damage from Grubhub’s practices goes beyond your bank account. It creates a ledger of broken trust and reputational harm for the very communities it claims to serve. For local restaurants, this is a nightmare. Grubhub has added hundreds of thousands of restaurants to its platform without their consent, creating what it calls “Unaffiliated Restaurants.” At one point, more than 320,000 restaurants, over half the platform, were listed without authorization.

When an order is placed through Grubhub from one of these restaurants, it often results in higher charges, delays, and errors. The customer, unaware of the situation, blames the local business. The restaurant is left dealing with angry customers and negative reviews for a service they never agreed to. When they demand to be removed, Grubhub stalls, using the opportunity to try and sell them a paid partnership.

For drivers, the company sells a false promise of prosperity. By advertising wages like $26 per hour, Grubhub lures in workers who must provide their own cars, gas, and insurance. The reality is starkly different. In 2023, the median driver earned just $11 per hour. Only the top 2% of drivers ever reach the advertised rates. And for diners with gift cards, Grubhub’s fraud detection system frequently blocks accounts and cancels orders, effectively seizing the remaining funds. It’s a system that treats everyone—diners, restaurants, and drivers—as resources to be squeezed.

LEGAL RECEIPTS: THE PAPER TRAIL

The evidence against Grubhub is not just anecdotal; it’s documented in the company’s own internal communications, now laid bare in the FTC’s complaint. Executives were fully aware of the deceptive nature of their tactics.

SOCIETAL IMPACT MAPPING

ECONOMIC INEQUALITY

Grubhub’s business model functions as a massive wealth transfer from local communities to a centralized corporation. It positions itself as an essential middleman between you and your neighborhood restaurant, then uses its market power to siphon money from every transaction through deceptive means. The hidden fees take money directly from diners. The non-consensual listings harm the reputation and bottom line of small, independent restaurants, forcing many to either pay Grubhub’s commissions or lose business. The misleading wage promises exploit a precarious workforce of gig drivers who bear all the costs of their labor.

This is a parasitic relationship. Instead of creating value, Grubhub extracts it by manipulating information and exploiting the trust of all parties involved. Local economies suffer as a percentage of every dollar spent on food delivery is funneled away from the community and into corporate coffers.

THE COST OF DECEPTION

WHAT NOW? A WATCHLIST

The legal battle has begun, but accountability requires constant public pressure. These are the roles and organizations to watch as this case unfolds.

Your power is not just in watching. The most effective resistance is redirecting your money and energy. Call restaurants directly to place your order. Use their in-house delivery if they have it, or pick it up yourself. Support mutual aid networks and driver-led cooperatives that are building alternatives to the exploitative gig economy. Demand stronger regulations from your local and federal representatives to outlaw these “dark patterns” and pricing schemes. The system only works because we participate in it.