December 3, 2021

DoorDash, Grubhub mislead restaurants, customers, especially during COVID pandemic, Chicago says in lawsuits

CHICAGO — Chicago officers on Friday accused DoorDash and Grubhub of harming town’s eating places and their prospects by charging excessive charges and thru different misleading practices when supply and takeout enterprise grew to become important to the trade during the COVID-19 pandemic.

The town officers consider their lawsuits in opposition to the supply corporations are essentially the most sweeping of their type introduced by a metropolis.

“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,” Mayor Lori Lightfoot mentioned in an announcement.

Representatives for the 2 corporations referred to as the lawsuits filed Friday in Cook dinner County Circuit Courtroom “baseless.”

Supply corporations have been the goal of authorized authorities in different cities and states earlier than, however these efforts have focused particular insurance policies in comparison with Chicago’s assault on quite a few parts of the businesses’ operations.

San Francisco’s district legal professional has accused supply corporations of violating California regulation by classifying drivers as contractors. And Washington, D.C., reached a settlement with DoorDash in 2019 after alleging the corporate misled prospects about how a lot drivers obtained in ideas.

The Massachusetts legal professional normal’s workplace in July filed a lawsuit accusing Grubhub of charging eating places illegally excessive charges during the pandemic. The state had capped charges for a lot of 2020.

Based on the Chicago lawsuits, each corporations promote supply providers for eating places with out their settlement, hurting the companies’ fame when prospects are sad about the fee or service.

Metropolis investigators additionally discovered that each corporations cost increased costs for objects than eating places set on their very own menus and cost extra in whole charges than initially disclosed to prospects.

Taylor Bennett, a spokesman for DoorDash, referred to as the swimsuit “baseless.”

“DoorDash has stood with the City of Chicago throughout the pandemic, waiving fees for restaurants, providing $500,000 in direct grants, creating strong earning opportunities, and delivering food and other necessities to communities in need,” Bennett mentioned. “This lawsuit will cost taxpayers and deliver nothing.”

Grant Klinzman, a spokesman for Grubhub, mentioned the corporate was disenchanted by Lightfoot’s resolution to file the swimsuit.

“Every single allegation is categorically wrong and we will aggressively defend our business practices,” he mentioned. “We look forward to responding in court and are confident we will prevail.”

The lawsuits do not specify a complete monetary penalty they’re in search of. The town is asking for a positive for every violation of town’s code and an order that will cease them from violating it.