GrubHub Inc, the owner of popular online food-delivery services GrubHub and Seamless, agreed to restructure its billing formula Wednesday after a year-long investigation by the New York state attorney general found that the company's restaurant partners were withholding tips from their delivery workers.
The company charged a fee to restaurants based on a percentage of the total food and drink, taxes and tips paid by customers. Once the fee was deducted, the remainder was returned to restaurants, according to Attorney General Eric Schneiderman's office.
The investigation found the fee created an incentive for restaurants to not fully distribute tips to their delivery workers.
Restaurants could “shortchange workers out of their hard-earned tips - tips that customers intended for them,” Attorney General Schneiderman said.
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