The city of Chicago filed lawsuits against DoorDash and Grubhub on Friday alleging food delivery services of “fraudulent” business practices during the coronavirus pandemic.
The city said in a statement that companies “engage in fraudulent and unfair business practices that harm restaurants and mislead consumers”.
Chicago seeks “greater transparency and other important behavioral changes, compensation for restaurants and consumers harmed by these predatory tactics, and civil penalties for violating the law”.
The city filed separate lawsuits against the companies in the Cook County Superior Court.
Both companies are accused of promoting orders and delivery services from unaffiliated restaurants without the consent of the restaurants and of hiding the fact that the menu prices on their platforms are often higher than when customers order directly from restaurants.
The city also said the companies have lured customers into a “bait and switch” by charging customers for delivery costs up to six times higher than originally advertised.
Grubhub is accused of posting misleading phone numbers and creating “scam websites” for restaurants. The city went on to claim that Grubhub had violated the city’s 15% emergency limit for restaurant orders.
DoorDash is particularly accused of having induced customers to “tip” the drivers directly when the tip was used to subsidize the payment of the drivers by DoorDash. The company is also accused of having a $ 1.50 Chicago Commission on orders solely for the benefit of the company.
Grant Klinzman, a spokesman for Grubhub, told The Hill that the company “Deeply disappointed in Mayor Lightfoot’s (D) decision to file this unsubstantiated lawsuit ”.
“Every single allegation is categorically false and we will aggressively defend our business practices. We look forward to responding in court and are confident that we will prevail. ”
In a statement to The Hill, a DoorDash spokesman said: “This lawsuit is unfounded. It is a waste of taxpayers’ resources and Chicagoans should be outraged. “
“DoorDash has been with the city of Chicago throughout the pandemic, waiving taxes on restaurants, providing $ 500,000 in direct grants, generating strong revenue opportunities, and delivering food and other necessities to communities in need,” the spokesman said. “This lawsuit will cost taxpayers and bring nothing.”
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