Chicago sues DoorDash, Grubhub over ‘deceptive’ pandemic business practices
The City of Chicago filed lawsuits against DoorDash and Grubhub on Friday, accusing the meal delivery services of engaging in “deceptive” business practices during the coronavirus pandemic.
The city said in a statement that companies engaged in “deceptive and unfair business practices that harm restaurants and mislead consumers.”
Chicago is seeking “greater transparency and other key conduct modifications, restitution for restaurants and consumers hurt by these predatory tactics, and civil penalties for violations of the law.”
The city filed separate lawsuits against the companies in Cook County Superior Court.
Both companies are accused of advertising order and delivery services from unaffiliated restaurants without the restaurants’ consent, and hiding that menu prices on their platforms are often higher than if customers ordered directly from the restaurants.
The city further alleged that the companies lured customers into a “bait-and switch” by charging customers delivery fees that are up to six times as much as originally advertised.
Grubhub is accused of publishing deceptive telephone numbers and creating “imposter websites” for restaurants. The city further alleged that Grubhub violated the city’s emergency cap of 15 percent on restaurant orders.
DoorDash is specifically accused of misleading customers into “tipping” drivers directly when tips were used to subsidize DoorDash’s own payment of drivers. The company is also accused of imposing a $1.50 “Chicago Fee” on orders that solely benefited the company.
Grant Klinzman, a spokesperson for Grubhub, told The Hill in a statement that the company is “deeply disappointed by Mayor Lightfoot’s (D) decision to file this baseless lawsuit.”
“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.”
In a statement to The Hill, a DoorDash spokesperson said “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,” the spokesperson said. “This lawsuit will cost taxpayers and deliver nothing.”