Chicago officials accuse DoorDash and Grubhub of harming the city’s restaurants and their customers through high rates and other deceptive practices when delivery and takeaway businesses became essential to the industry during the COVID-19 pandemic
CHICAGO – Chicago officials on Friday accused DoorDash and Grubhub of harming the city’s restaurants and their customers by charging high fees and other deceptive practices when delivery and takeaway businesses became essential to the industry during the pandemic COVID-19.
City officials believe their lawsuits against delivery companies are the most extensive of their kind a city has filed.
“It is deeply worrying and unfortunate that these companies are breaking the law in these incredibly difficult times, using unfair and misleading tactics to take advantage of restaurants and consumers who were struggling to stay afloat,” Mayor Lori Lightfoot said in a communiqué.
Representatives of the two companies described the lawsuits filed Friday in Cook County Circuit Court as “unfounded.”
Delivery companies have been targeted by legal authorities in other cities and states before, but these efforts have been directed at specific policies compared to Chicago’s attack on numerous elements of the companies ’operations.
The San Francisco District Attorney has accused delivery companies of violating California law by classifying drivers as contractors. And Washington, DC, reached an agreement with DoorDash in 2019 after alleging the company misled customers about the amount drivers received from tips.
The Massachusetts attorney general’s office in July filed a lawsuit accusing Grubhub of charging restaurants illegally high rates during the pandemic. The state had limited fees for much of 2020.
According to Chicago lawsuits, both companies advertise restaurant delivery services without their agreement, damaging companies ’reputation when customers are dissatisfied with the cost or service.
City researchers also found that both companies charge higher prices for items than restaurants set on their own menus and charge more total commissions than were initially revealed to customers.
DoorDash spokeswoman Taylor Bennett called the lawsuit “unfounded.”
“DoorDash has been on the side of the city of Chicago throughout the pandemic, waiving restaurant fees, providing $ 500,000 in direct grants, creating strong profit opportunities and delivering food and other necessities to communities that need it,” he said. dir Bennett. “This lawsuit will cost taxpayers. And don’t deliver anything.”
Grubhub spokesman Grant Klinzman said the company was disappointed by Lightfoot’s decision to file the lawsuit.
“All allegations are categorically incorrect and we will aggressively defend our business practices,” he said. “We look forward to answering in court and we are confident we will prevail.”
The lawsuits do not specify a total financial penalty they are seeking. The city is asking for a fine for each violation of the city code and an order preventing them from violating it.