grubhub and doordash

City of Chicago Sues DoorDash and Grubhub Alleging Deceptive Practices

The city also claimed both platforms use a “bait-and-switch” method to attract customers with low delivery fees

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The city of Chicago has filed lawsuits against DoorDash and Grubhub, claiming the companies engaged in deceptive and unfair business practices that harmed restaurants and misled consumers, including during the pandemic.

The lawsuits, which were filed separately in Cook County Circuit Court, allege that both DoorDash and Grubhub "advertise order and delivery services from unaffiliated restaurants without their consent, leaving restaurants to repair reputational damage and resolve consumer complaints..."

The suits echo similar, longstanding claims from restaurants, including some Chicago establishments. Captain Hooks on the city's Near West Side is one of dozens listed in the lawsuit, accusing DoorDash and Grubhub of cheating them out of money.

"Everything has gone up with the fees that they have," according to Said Said, manager of Captain Hooks. "It’s something we can’t control or negotiate, it’s just being pushed on us."

The city also claimed both platforms use a “bait-and-switch” method to attract customers with low delivery fees, only to charge additional ones when they are about to place their order.

The lawsuits include additional claims specific to each company.

The city alleged that Grubhub deceptively shared telephone numbers for customers to connect with restaurants, but would charge the restaurants a commission for calls, even when they didn’t result in an order. The city also claimed Grubhub made “imposter websites” for restaurants to lure unsuspecting customers to its own platform.

READ: City of Chicago Lawsuit Against Grubhub

The lawsuit also stated Grubhub launched deceptive promotional campaigns to "save restaurants" during the pandemic, while forcing participating restaurants to extend their contracts, cover the cost of the promotions, and pay Grubhub its full commission on all orders. 

In separate statements, both companies called the lawsuits "baseless."

"We are deeply disappointed by Mayor Lightfoot's decision to file this baseless lawsuit," a Grubhub spokesman said in a statement. "Every single allegation is categorically wrong and we will aggressively defend our business practices. We look forward to responding in court and are confident we will prevail.”

READ: City of Chicago Lawsuit Against DoorDash

DoorDash has been accused by the city of misleading consumers to believe they were tipping drivers directly, when the “tip” was used to subsidize the company's payment to drivers. The city of Chicago also alleged DoorDash imposed a misleading "Chicago Fee" of $1.50 on every order in the city, "deceptively implying the fee was required by, or paid to, Chicago—when in fact DoorDash was the sole beneficiary."

DoorDash said the lawsuit is a "waste of taxpayer resources, and Chicagoans should be outraged."

"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," the company's statement read. "This lawsuit will cost taxpayers and deliver nothing."

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