Chicago has been wrestling with third-party delivery apps for a very long time now. Even before the pandemic, these delivery services were a contentious issue. Last November, Chicago attempted to stop apps like UberEats, DoorDash, and Grubhub from price-gouging restaurants by putting a 15% cap on restaurant delivery fees. (The cap eventually expired.) DoorDash immediately retaliated by slapping a $1.50 “Chicago Fee” on each order. Now, Chicago’s had enough: The city is suing both DoorDash and Grubhub.
The city announced the suit through Mayor Lori Lightfoot’s office. The announcement explains that the suit is based in the services’ “deceptive and unfair business practices that harm restaurants and mislead consumers.” Lightfoot writes:
As we stared down a global pandemic that shuttered businesses and drove people indoors, the defendants’ meal delivery service apps became a primary way for people to feed themselves and their families, as well as support local restaurants. It is deeply concerning and unfortunate that these companies broke the law during these incredibly difficult times, using unfair and deceptive tactics to take advantage of restaurants and consumers who were struggling to stay afloat.
The suit argues that DoorDash and Grubhub both used unsavory tactics to get business—like advertising delivery for restaurants they weren’t even in partnership with and hiding extra fees in the checkout process, elevating the cost of delivery up to sixfold. The suit also argues that the services hid the fact that in-app food prices were often much higher than advertised in the actual restaurant menus.
The suit also includes several company-specific complaints. For example, Grubhub was known to publish bogus phone numbers, still charging commissions even if a phone call didn’t result in a legitimate food order. Per the suit, Grubhub also created websites that looked like restaurants’ actual websites, but funneled back to Grubhub. The company is also being accused of forcing restaurants to cover the cost of the app’s pandemic campaign to “save restaurants.” On top of that, the suit claims that Grubhub violated last year’s 15% emergency cap on restaurant commissions.
Per the city announcement, DoorDash is accused of misleading customers into thinking that tips were going directly to delivery drivers. (In reality, they were being used to subsidize DoorDash’s normal pay per delivery.) Oh, and the retaliatory “Chicago Fee” we mentioned earlier? It didn’t actually go to the City of Chicago. It went to DoorDash.
It’s been a messy fight up until now. Running a restaurant isn’t a lucrative endeavor, and for those who consider it a labor of love, these delivery services have caused nothing but hassle and a black hole for money. However, according to the city suit, this is the first law enforcement activity against meal delivery companies in the United States, so this could bode well for future restaurant protections. In the meantime, want to help defeat the apps? The best thing you can do is order from the restaurant directly (check carefully for their number) and circumvent these apps altogether.