Chicago sues DoorDash and Grubhub for ‘unfair and misleading’ practices

The town of Chicago has sued meals supply companies DoorDash and Grubhub for allegedly utilizing misleading and unfair techniques that harm eating places in the course of the coronavirus pandemic. The 2 lawsuits accuse the companies of a panoply of misconduct, together with falsely promoting supply companies for eating places with out their consent, charging deceptive charges to clients, and hiding the prices that they added to a meal.

“It’s deeply regarding and unlucky that these firms broke the legislation throughout these extremely troublesome occasions, utilizing unfair and misleading techniques to make the most of eating places and shoppers who have been struggling to remain afloat,” stated Chicago Mayor Lori Lightfoot, who filed the complaints alongside Appearing Enterprise Affairs and Client Safety (BACP) Commissioner Kenneth Meyer, and company counsel Celia Meza.

The fits apparently stem from a collaboration between the BACP and the Metropolis of Chicago Regulation Division, they usually assert claims based mostly on the Chicago Municipal Code. However they echo incidents cited in different lawsuits and public controversies. Grubhub’s lawsuit, as an illustration, claims the corporate’s harshly criticized “Supper for Assist” low cost “was so misleading that it was pressured to concern corrective statements nationally.” Amongst many different points, it additionally singles out Grubhub’s observe of publicizing telephone numbers that direct callers to eating places however quietly add their very own charges, in addition to making “imposter” variations of restaurant web sites.

Grubhub denied the accusations. “We’re deeply disillusioned by Mayor Lightfoot’s determination to file this baseless lawsuit. Each single allegation is categorically mistaken and we are going to aggressively defend our enterprise practices. We look ahead to responding in courtroom and are assured we are going to prevail,” a spokesperson informed The Verge. Grubhub says it discontinued telephone orders on August twenty third, though customers can nonetheless place a Grubhub order via a consultant over the telephone, and it now not makes the web sites in query.

That is the second latest authorities lawsuit towards Grubhub. In July, Massachusetts Lawyer Common Maura Healey sued it for allegedly exceeding a neighborhood 15 % cap on charges to eating places — a cost that can be current within the Chicago criticism.

DoorDash is equally accused of getting round Chicago’s 15 % cap with a $1.50 “Chicago Payment” that “misleadingly conveyed to shoppers that the town was imposing this price and receiving the cash.”

DoorDash’s lawsuit additionally features a shot towards the corporate’s tipping coverage — which solicited “ideas” to pay drivers’ present wages fairly than truly passing them on as a bonus. (DoorDash introduced that it might change the coverage in 2019.) “DoorDash misled shoppers in Chicago to consider that they have been utilizing the ‘tip’ function on the DoorDash Platform to complement the earnings of the driving force who delivered their meals, over and above the bottom pay DoorDash supplied. As a substitute, DoorDash largely used the buyer’s ‘tip’ to subsidize its personal agreed cost to the driving force,” the swimsuit says.

DoorDash additionally denied the swimsuit’s deserves. “This lawsuit is baseless. It’s a waste of taxpayer sources, and Chicagoans must be outraged. DoorDash has stood with the Metropolis of Chicago all through the pandemic, waiving charges for eating places, offering $500,000 in direct grants, creating robust incomes alternatives, and delivering meals and different requirements to communities in want,” stated a spokesperson in an announcement to The Verge. Final yr it settled a Washington, DC lawsuit over its tipping coverage for $2.5 million; the settlement didn’t embrace an admission of wrongdoing.