City of Chicago Delivers Lawsuits to Grubhub, DoorDash

The City of Chicago sued DoorDash and Grubhub Friday (Aug. 27), alleging the delivery giants deceive customers about the savings the services confer, according to a press release.

“The lawsuits assert claims under the Chicago Municipal Code for engaging in deceptive and unfair business practices that harm restaurants and mislead consumers,” the release stated.

The release was issued jointly from Mayor Lori Lightfoot’s office, the city’s acting commissioner of Business Affairs and Consumer Protection and the city’s corporation counsel.

The suits “are the first comprehensive law enforcement actions against meal delivery companies in the United States,” according to the release.

Citing alleged violations of Chicago’s Municipal Code, the suits accuse the companies of “engaging in deceptive and unfair business practices that harm restaurants and mislead consumers,” the release stated.

“They seek injunctive relief in the form of greater transparency and other key conduct modifications, restitution for restaurants and consumers hurt by these predatory tactics, and civil penalties for violations of the law,” according to the release.

“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,” said Lightfoot said in the release. “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.”

According to the release, the suits’ specific allegations include that the two food delivery services “advertise order and delivery services from unaffiliated restaurants without their consent, leaving restaurants to repair reputational damage and resolve consumer complaints caused by defendants” and “lure consumers into a bait-and-switch with deceptively small delivery fees upfront, only to charge misleading fees at the end of the transaction.”

The release stated that the suits also allege the companies “hide that menu prices on their platforms are often significantly higher than the prices available if ordering directly from the restaurant.”

The suits also allege each company engaged in additional but separate deceptive business practices, according to the release.

“We discovered that Grubhub and DoorDash have been engaging in deceptive and misleading business practices that harm consumers and exploit restaurants,” said Acting BACP Commissioner Kenneth Meyer said in the release. “These practices continued unabated during the pandemic when restaurants were struggling to survive. We heard from the hospitality industry and Chicago’s consumers about these unfair practices, and this action demonstrates we will hold non-complying businesses accountable.”

DoorDash said in a statement: “This lawsuit is without merit and a waste of taxpayer resources. Chicagoans should be outraged. DoorDash has stood with Chicago’s restaurants to help keep their businesses afloat through the COVID crisis, providing a flexible, low-barrier way for Dashers to earn a living, and delivering safely and reliably to residents across the city — which makes this lawsuit extremely disappointing given our ongoing partnership with the city.”

Grubhub similarly stated that it was not in violation of any Chicago ordinances.