Chicago sued Grubhub and DoorDash for using unfair and deceptive tactics during the coronavirus pandemic. Two lawsuits allege that a number of misconduct allegations were made against Grubhub and DoorDash. These include falsely advertising delivery services to restaurants, charging customers misleading fees, and concealing the cost of meals.
It is extremely concerning and regrettable that these companies violated the law during these extremely difficult times. They used unfair and deceptive techniques to take advantage restaurants and customers who were struggling to stay alive, stated Lori Lightfoot, Chicago Mayor. She filed the complaints along with Kenneth Meyer, Acting Business Affairs (BACP) Commissioner, and Celia Meza, corporation counsel.
It is extremely concerning and regrettable that these companies violated the law in these difficult times.
These suits are reportedly the result of a collaboration between BACP and City of Chicago Law Department and assert claims based upon the Chicago Municipal Code. They also cite incidents from other lawsuits and public controversies. Grubhubs lawsuit claims that the company's highly criticized Supper For Support discount was so misleading that it was forced by national corrective statements. It also points out Grubhubs practice to publicize phone numbers that direct people to restaurants, but then quietly add their own fees.
Grubhub has denied the allegations. We are very disappointed that Mayor Lightfoot has filed this baseless lawsuit. We will vigorously defend our business practices and every allegation is completely false. A spokesperson for Grubhub said that they look forward to answering in court and were confident we would prevail. Grubhub has announced that it stopped accepting phone orders as of August 23rd. However, users can place Grubhub orders over the phone with a representative and the website is still available.
This is Grubhub's second lawsuit by the government. In July, Massachusetts Attorney General Maura Shealey sued Grubhub for allegedly exceeding a local 15% cap on fees to restaurants. This charge is also included in the Chicago complaint.
DoorDash is also accused of skirting Chicago's 15% cap by charging a $1.50 Chicago Fee. This fee misled consumers into believing that the city was imposing the fee and that they were receiving the money.
These claims echo previous complaints about both companies.
DoorDash's lawsuit also targets the tipping policy of the company, which encouraged tips to pay drivers wages instead of giving them as bonuses. DoorDash stated that the policy would be changed in 2019. DoorDash misled Chicagoans into believing that they were using the tip function on the DoorDash Platform in order to supplement the income of their driver. This was in addition to the base pay DoorDash paid. According to the suit, DoorDash used the tip money to subside its agreed payment to the driver.
DoorDash also rejected the merits of the lawsuit. This lawsuit is completely baseless. This lawsuit is a wasteful use of taxpayer resources and Chicagoans should be furious. DoorDash supported Chicago during the pandemic by waiving restaurant fees, providing $500,000 in grants directly, creating strong earning opportunities and delivering food and other necessities for communities in need. It settled a lawsuit in Washington, DC over its tipping policy last year for $2.5million. The settlement did not include any admissions of wrongdoing.