The city of
These lawsuits are the result of a collaborative investigation led by Business Affairs and Consumer Protection (BACP) and the city's law department. They are the first comprehensive law enforcement actions against meal delivery companies in
The lawsuits claim the companies violated the Chicago Municipal Code for engaging in deceptive and unfair business practices that harm restaurants and mislead consumers. and seek injunctive relief in the form of greater transparency and other key conduct modifications, restitution for restaurants and consumers hurt by the predatory tactics, and civil penalties.
The legal action alleges that
- Advertise order and delivery services from unaffiliated restaurants without their consent, leaving restaurants to repair reputational damage and resolve consumer complaints caused by Defendants.
- Lure consumers into a bait-and-switch with deceptively small delivery fees upfront, only to charge misleading fees at the end of the transaction. This increases the total cost of delivery by as much as six times the amount initially advertised.
- Hide that menu prices on their platforms are often significantly higher than the prices available if ordering directly from the restaurant.
Other misconduct is specific to each company, according to the release.
- Publishing deceptive "routing" telephone numbers that
Grubhub represented as the restaurant's direct number, and regularly charging commissions even when calls to these numbers did not result in an order. -
Creating and maintaining "impostor Web sites" for restaurants, which look like the restaurant's actual website but route unsuspecting consumers to
Grubhub . -
Launching deceptive, promotional campaigns to "save restaurants" during the pandemic, while forcing participating restaurants to extend their contracts, cover the cost of the promotions, and pay
Grubhub its full commission on all orders. - Violating the City's emergency cap of 15% on restaurant commissions.
- Misleading consumers to believe they were tipping drivers directly, when in fact the customer "tip" was used to subsidize
DoorDash's own payment to its drivers. -
Imposing a misleading "Chicago Fee" of
$1.50 on every order in the City, deceptively implying the fee was required by, or paid to,Chicago — when in factDoorDash was the sole beneficiary.
"We discovered that
"
"Every single allegation is categorically wrong and we will aggressively defend our business practices," he said. "We look forward to responding in court and are confident we will prevail."
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