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Food delivery services GrubHub and DoorDash are being taken to court by the city of Chicago, under accusations that the companies “deceived consumers and shortchanged restaurants already reeling from the pandemic shutdown.”
In a statement from the press office of Mayor Lori E. Lightfoot, it has been stated that the city wants the businesses to operate more transparently and is calling for a reformation of their business practices.
Currently, the lawsuit claims, both companies utilize “bait-and-switch” tactics to deceive customers by offering small delivery fees at first, before piling on the additional charges.
“This increases the total cost of delivery by as much as six times the amount initially advertised,” the news release claims. The businesses also advertised order and delivery services from restaurants “unaffiliated” with the platform, “leaving restaurants to repair reputational damage and resolve consumer complaints” as a result.
Both businesses were “engaging in deceptive and misleading business practices that harm consumers and exploit restaurants,” states Acting BACP Commissioner Kenneth Meyer. “These practices continued unabated during the pandemic when restaurants were struggling to survive.”
It was reported that at the height of last year’s pandemic-inflicted lockdowns, around half of Chicago’s 7,500 restaurants had closed, either temporarily or permanently. In 2020 alone, some 44,000 restaurant workers in the area had lost their jobs.
GrubHub, in particular, has also come under fire for deceiving customers in the form of “routing” telephone numbers, fake websites for restaurants, violating the city’s 15% cap on restaurant commissions, and launching “deceptive, promotional campaigns to ‘save restaurants’ during the pandemic.” It allegedly passed costs on to the restaurants while collecting commission.
DoorDash was also met with disdain for “misleading” customers regarding tips, which were apparently taken by the company instead of being given to the driver. It was also guilty of imposing a “misleading ‘Chicago Fee,’” the US$1.50 being pocketed by the platform.
“We heard from the hospitality industry and Chicago’s consumers about these unfair practices, and this action demonstrates we will hold non-complying businesses accountable,” Meyers declares.
The city is still collecting accounts of the businesses’ misconduct. It’s encouraging restaurants and customers to share their experiences at [email protected].
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