Grubhub and its parent company agreed to pay $5 million to settle a class action lawsuit accusing the food delivery platform of misleading California customers about delivery fees and restaurant menu prices. As part of the settlement, eligible California customers will receive a $10 credit toward future Grubhub or Seamless delivery orders.
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Status: Settlement Reached — $5 Million | $10 Credit Per Person
What Were the Accusations Against Grubhub?
The lawsuit centered on two primary allegations about how Grubhub operated in California:
- Misleading delivery fee advertising — Grubhub promoted low or no delivery fees to attract customers, but then added other charges such as service fees, small order fees, and inflated menu prices that effectively canceled out any savings from the advertised low delivery fee
- Inflated menu prices — prices for items on Grubhub were often higher than the same items listed on the restaurant’s own menu or in the physical restaurant, but Grubhub did not clearly disclose this markup to customers
The core complaint was transparency. When a customer opens a food delivery app and sees “$0 delivery fee” or “free delivery,” they expect to pay the menu price for their food plus perhaps a small tip. What they actually ended up paying, the lawsuit argued, was significantly more than what they would have paid ordering directly from the restaurant — and Grubhub did not make that clear upfront.
How Did the Price Inflation Work?
Food delivery platforms generally operate on a commission model. Restaurants pay Grubhub a percentage of each order — often 15 to 30 percent — for access to the platform and its delivery infrastructure. Many restaurants absorb this cost as a marketing expense. But others pass it on to customers by allowing Grubhub to list their menu items at higher prices than what the restaurant charges in-store or on its own website.
For example, a burrito that costs $10 at the restaurant counter might appear as $12.50 or $13 on Grubhub. The customer also pays a delivery fee (even if it is described as “reduced”) plus a service fee, plus tax calculated on the inflated price. A meal that would cost $10 plus tax in person could easily cost $18 or more through the app.
The lawsuit argued that Grubhub was aware of these markups but did not clearly disclose them to customers, creating a false impression that ordering through the app was competitively priced when it was not.
Who Is Eligible for the $10 Credit?
The settlement class includes California residents who placed a delivery order through Grubhub or Seamless on or after January 24, 2019. If you ordered food delivery through either platform during this period and your delivery address was in California, you are likely eligible.
Grubhub has the transaction records to identify class members, so in many cases the company will proactively distribute the credits to eligible accounts. However, if you no longer have an active Grubhub account or believe you qualify but did not receive a credit, you should check the settlement website for instructions on how to submit a claim.
What Exactly Do You Get?
Each eligible class member receives a $10 credit that can be applied to a future Grubhub or Seamless delivery order. The credit is not a cash payment — it can only be used on the platform. This is a common structure in settlements involving subscription services and digital platforms, where the defendant provides credits rather than cash.
While some class members may prefer cash, the credit structure allows the settlement fund to stretch further and provide something to a larger number of people. Given that millions of Californians have used Grubhub since 2019, a cash payment per person from a $5 million fund would likely be only a few dollars at most.
Tips for Saving Money on Food Delivery
This lawsuit highlights a broader issue with food delivery pricing that every consumer should be aware of:
- Compare prices — before placing an order through any delivery app, check the restaurant’s own website or menu to see if prices are different
- Look at the full cost — add up the menu items, delivery fee, service fee, taxes, and tip to understand the true total before you place an order
- Order directly when possible — many restaurants offer their own online ordering and delivery, often at lower prices than third-party apps
- Use pickup instead of delivery — if the restaurant is nearby, selecting pickup often eliminates delivery fees and service fees
- Watch for subscription traps — delivery platforms offer monthly subscription programs like Grubhub+ that waive delivery fees, but the service fees and inflated prices still apply
What This Means for the Food Delivery Industry
This settlement is part of a growing wave of legal action against food delivery platforms over pricing transparency. Consumers are increasingly aware that the total cost of a delivery order is far higher than what appears at first glance, and regulators and courts are starting to take notice.
Several cities and states have already passed or proposed legislation requiring delivery platforms to clearly disclose all fees and markups before a customer places an order. This settlement adds pressure on the industry to move toward more straightforward pricing practices.
Case Details
| Defendant | Grubhub Inc. / Seamless |
| Allegation | False advertising of delivery fees and failure to disclose inflated menu prices in California |
| Settlement Amount | $5 million |
| Benefit | $10 Grubhub/Seamless credit per eligible customer |
| Class Period | January 24, 2019 — present |
| Eligibility | California residents who placed delivery orders via Grubhub or Seamless |
| Status | Settled |
By Steve Levine | Published: February 18, 2026
Legal Disclaimer
This article is for informational purposes only and does not constitute legal advice. OpenClassActions.org is not a law firm and does not represent any party in this litigation. If you have questions about your rights as a consumer, consult with a qualified attorney. Settlement terms and eligibility may be subject to change.