On Friday, the City of Chicago said that it had filed consumer protection complaints against DoorDash and Grubhub for engaging in misleading and unfair business practices with customers and restaurants alike. The city’s Department of Business Affairs and Consumer Protection (BACP) and its Law Department initiated the legal action following an investigation.
The city asserts that both delivery services post “unaffiliated restaurants without their consent, leaving restaurants to repair reputational damage;” use “bait-and-switch” tactics with consumers on delivery fees; and “hide that menu prices on their platforms are often significantly higher than the prices available if ordering directly from the restaurant.”
The city leveled specific complaints against each corporation. For Grubhub, the city asserted that the company engaged in “deceptive, promotional campaigns to ‘save restaurants’ during the pandemic” and violated the city’s 15% emergency commission cap, deceptively routing restaurant phone calls through its own phone number and making its own website for the restaurant.
The city alleges that DoorDash deceived consumers about how tips were used and also misled consumers about their “Chicago Fee” by making it appear that the fee was imposed by the city.
“As we stared down a global pandemic that shuttered businesses and drove people indoors, the defendants’ meal delivery service apps became a primary way for people to feed themselves and their families, as well as support local restaurants,” Chicago Mayor Lori E. Lightfoot said in an announcement.
“It is deeply concerning and unfortunate that these companies broke the law during these incredibly difficult times, using unfair and deceptive tactics to take advantage of restaurants and consumers who were struggling to stay afloat,” she added.
When contacted for a response, Grubhub and Doordash both disputed all of the charges leveled against them.
“We are deeply disappointed by Mayor Lightfoot’s decision to file this baseless lawsuit,” a Grubhub spokesperson responded. “Every single allegation is categorically wrong, and we will aggressively defend our business practices. We look forward to responding in court and are confident we will prevail.”
Meanwhile, DoorDash responded that “This lawsuit is baseless. It is a waste of taxpayer resources, and Chicagoans should be outraged. DoorDash has stood with the City of Chicago throughout the pandemic, waiving fees for restaurants, providing $500,000 in direct grants, creating strong earning opportunities, and delivering food and other necessities to communities in need. This lawsuit will cost taxpayers and deliver nothing.”
While Uber Eats and other services are not named in the current complaints, they may still face legal action on their own, since Chicago appears to be conducting an investigation.