August 27, 2021
The lawsuits have been universally celebrated by restaurant owners who feel the companies have gaslit them throughout the pandemic
The city of Chicago has filed separate lawsuits against Grubhub and DoorDash alleging the third-party delivery companies “engaged in deceptive practices to prey on its affiliated restaurants.” The lawsuits, filed today, August 27, in Cook County circuit court, contain a multitude of allegations, including that the companies use bait-and-switch tactics to fool customers into thinking they’ll be paying lower fees compared to what they’re ultimately charged.
The DoorDash lawsuit also alleges that the company “used consumer tips to pay itself rather than its drivers.” There’s also the question of the Chicago Fee, the charge DoorDash added to compensate for the city’s pandemic-era fee cap. The city says DoorDash tried to make it seem like the Chicago Fee was being administered by the city, and even included a customer’s tweet from January in the lawsuit: “one thing about Chicago, they gon tax your ass LMAO.”
A DoorDash spokesperson says drivers get 100 percent of tips but had no comment on the Chicago Fee. Tipping was also the subject of a $2.5 million settlement after the Washington, D.C. attorney general investigated DoorDash in November 2020. At one point, DoorDash was using tips to subsidized wages for drivers, meaning employees wouldn’t earn more than their locked-in wages. DoorDash has since ended this practice.
Attorneys for the city listed many issues relevant to restaurant owners in the lawsuits, including adding restaurants to the platform without the owner’s knowledge or consent, using telephone routing numbers to charge commission on phone calls that didn’t result in orders, and even creating fake restaurant websites to redirect customers to the delivery platform. Many owners have raised concerns that the city hasn’t done enough to help them, although the city did institute a 15 percent fee cap on third parties first instituted in November 2020. DoorDash and Grubhub are suing San Francisco over its decision to implement a permanent fee cap on third-party delivery companies; New York is now looking to enact the same policy.
These are the first lawsuits of their kind of America. Other municipalities have sued the companies, honing in one a single issue. For example, Massachusetts’ attorney general sued Grubhub in July, accusing it of violating a fee cap. Chicago’s lawsuit is the first to combine a variety of issues in one filing; city officials say one lawsuit is more efficient.
On Friday afternoon, Chicago’s restaurants cheered the city’s filings. Many of them — including Medici’s on 57th Street, Bianca’s Burgers, Parachute — were mentioned in the lawsuit, citing social media posts and media coverage of the alleged mistreatment. One example came from Taqueria La Chaquita in Lawndale, with a DoorDash menu pulled on August 26 showing a selection of seafood tacos. Mariscos are great, however, the restaurant does not serve seafood.
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