The city of Chicago has sued food delivery services DoorDash and Grubhub for allegedly using deceptive and unfair tactics that harmed restaurants during the coronavirus pandemic. Both lawsuits accuse the services of an array of misconduct, including misleading delivery services for restaurants without their consent, charging customers deceptive fees and hiding costs they added to a meal.
“It is deeply concerning and regrettable that these companies have broken the law in these incredibly difficult times, using unfair and deceptive tactics to take advantage of restaurants and consumers who were struggling to stay afloat,” said Chicago Mayor Lori. Lightfoot, who lodged the complaints alongside Acting Commercial and Consumer Affairs Commissioner (BACP) Kenneth Meyer and company lawyer Celia Meza.
The lawsuits apparently stem from a collaboration between the BACP and the City of Chicago Legal Department, and they assert claims based on the Chicago municipal code. But they echo incidents cited in other lawsuits and public controversies. The Grubhub lawsuit, for example, claims the company’s harshly criticized “Supper for Support” rebate “was so misleading it was forced to issue corrective statements nationwide.” Among many other issues, he also distinguishes Grubhub’s practice of posting phone numbers that direct callers to restaurants but quietly add their own charges, as well as creating “sham” versions of restaurant websites.
Grubhub has denied the charges. “We are deeply disappointed with Mayor Lightfoot’s decision to file this baseless lawsuit. Every claim is categorically false and we will aggressively defend our business practices. We look forward to responding in court and are confident that we will prevail, ”a spokesperson said. The edge. Grubhub says it discontinued phone orders on August 23, although users can still place a Grubhub order through a representative over the phone, and it no longer creates the websites in question.
This is the second recent government lawsuit against Grubhub. In July, Massachusetts Attorney General Maura Healey sued him for allegedly exceeding a local 15% cap on restaurant fees – a charge that is also present in the Chicago lawsuit.
DoorDash is also accused of bypassing Chicago’s 15% cap with a “Chicago fee” of $ 1.50 that “misleadingly indicated to consumers that the city was charging those fees and receiving the money.”
The DoorDash lawsuit also includes a shot at the company’s tip policy – which solicited “tips” to pay drivers’ existing wages rather than passing them on as a bonus. (DoorDash announced it will change the policy in 2019.) DoorDash base salary provided. Instead, DoorDash extensively used the consumer’s “tip” to subsidize its own agreed payment to the driver, “the lawsuit says.
DoorDash has also denied the merits of the lawsuit. “This lawsuit is unfounded. This is a waste of taxpayer resources, and the people of Chicago should be outraged. DoorDash has supported the city of Chicago throughout the pandemic, waiving restoration costs, providing $ 500,000 in direct grants, creating solid income opportunities, and providing food and other essentials to communities in need, ”a spokesperson said in a statement to The edge. Last year, he settled a lawsuit in Washington, DC over his tip policy for $ 2.5 million; the settlement did not contain an admission of wrongdoing.