DoorDash, Grubhub sued by Chicago for alleged unfair practices during pandemic

Food delivery companies DoorDash and Grubhub have been sued by the city of Chicago in the United States. They are being accused of using misleading and unfair techniques to harm restaurants during the COVID-19 pandemic, according to the lawsuit. The companies are accused of a series of wrongdoings in two separate lawsuits. Falsely advertising delivery services for restaurants without their authorization, charging consumers misleading fees, and disguising the costs they added to a meal are all instances of misconduct.

DoorDash, Grubhub sued by Chicago for unfair practices during COVID-19 pandemic 

The complaint was filed by Chicago Mayor Lori Lightfoot with Acting Business Affairs and Consumer Protection (BACP) Commissioner Kenneth Meyer and corporation counsel Celia Meza. According to reports, the Mayor expressed concern and regret that these companies disobeyed the law during these very tough times, in the middle of the COVID-19 pandemic and taking advantage of restaurants and consumers who were battling to stay afloat.

Claims by the lawsuit against Grubhub

The lawsuits are said to be the result of collaboration between the BACP and the Chicago Law Department. They made their claims based on the Chicago Municipal Code, but they also brought up events that have been addressed in previous lawsuits and public controversies. In Grubhub's lawsuit, for example, the claim argues that the company's widely panned Supper for Support campaign was so deceptive that it was forced to release national correction remarks. The claim also points out Grubhub's practice of publishing phone numbers that route callers to restaurants while discreetly adding their own costs, as well as creating impostor versions of restaurant websites, among many other concerns. 

Grubhub's response

The allegations were dismissed by Grubhub. They expressed their disappointment with Mayor Lightfoot's choice to file this lawsuit. They went on to say that every single claim is false and that they will aggressively defend their business operations. According to reports, they stated that they are looking forward to replying in court and are convinced that they will succeed. Grubhub also stated that it stopped taking phone orders on August 23. Orders can be placed via phone though, through a representative. The websites mentioned in the claim are no longer being made by the company. 

Grubhub's history 

This is the second recent government lawsuit against Grubhub. In July, Massachusetts Attorney General Maura Healey sued it for allegedly exceeding a local 15% cap on fees to restaurants. This charge is also present in the Chicago complaint. Grubhub Inc. is an American online and mobile prepared food ordering and delivery platform. It is owned by Just Eat Takeaway that connects diners with local restaurants. Grubhub is based in Chicago, Illinois and was founded in 2004. Grubhub Seamless is publicly traded on the New York Stock Exchange. It was acquired by Just Eat Takeaway last year for 7.3 billion USD in stock. There have been multiple lawsuits against the company previously as well. Some of the lawsuits are:

• Lawson vs. Grubhub 
• Wallace v. Grubhub Holdings 
• Davitashvili v GrubHub Inc.

Claims by the lawsuit against DoorDash

DoorDash is similarly accused of getting around Chicago’s 15% cap with a $1.50 Chicago Fee that misleadingly conveyed to consumers that the city was imposing this fee and receiving the money. The lawsuit also mentions DoorDash's tipping policy. The company collected tips to pay drivers' existing salaries rather than passing them on as a bonus. In 2019, DoorDash announced that it would amend its policy. According to the lawsuit, DoorDash misled Chicago customers into believing that they were using the DoorDash Platform's 'tip' feature to enhance the income of the driver who delivered their food, in addition to the base pay offered by DoorDash. Instead, DoorDash mostly exploited the customer's 'tip' to fund its own agreed-upon payment to the driver, according to reports.

DoorDash's response

The suit's claims were similarly rejected by DoorDash. The lawsuit, they said, was baseless and a waste of taxpayer funds. They claimed that Chicago residents should be angry. According to a report, DoorDash said that they have supported the City of Chicago during the pandemic by waiving restaurant fees, offering $500,000 in direct funding, generating excellent employment opportunities, and delivering food and other needs to areas that required it. Hours after the announcement of this suit, the DoorDash consumer platform crashed. Netizens put up several tweets about it, expressing their emotions on the app being down.

DoorDash's history 

With a 56% market share, DoorDash is the largest food delivery company in the United States. It also has a 60% market share in the convenience delivery category. It is also currently a publicly traded company, listed on the New York Stock Exchange. DoorDash has also had previous lawsuits and controversies. DoorDash paid $2.5 million to settle a tipping policy complaint in Washington, DC last year. There was no acknowledgement of wrongdoing in the settlement. It was also previously accused of withholding tips from drivers, exorbitant fees from consumers and a data breach as well. The data breach was confirmed by the company, in 2019.

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