Chicago has finally signed a $10 million settlement with Uber Eats and Postmates to resolve the city's investigation into purported misconduct by the meal delivery platforms during the pandemic, saying Monday that the deal closes a two-year probe into the apps' practice of listing restaurants without their consent.
The city's probe stemmed from the unwanted listings of Chicago restaurants on the apps owned by San Francisco-based Uber Technologies Inc., according to Mayor Lori Lightfoot's office. The city said Uber Eats and Postmates also violated Chicago's emergency fee cap ordinance during the COVID-19 pandemic and engaged in other advertising-related misconduct.
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Betsy A. Miller, a Cohen Milstein Sellers & Toll PLLC lawyer who represented Chicago in the matter, told Law360 on Monday that Chicago in 2021 began to receive a variety of complaints from restaurants about the Uber Eats, Postmates, Grubhub and DoorDash delivery apps. The restaurants complained that the apps' commissions were too high, that eateries were being listed without permission, and that the apps were engaged in deceptive pricing on their platforms.
"During the pandemic in Chicago, half of the city's 7,500 registered restaurants closed at some point," Miller said. "Consumers needed to get their food, restaurants were trying to provide it, and this technology was in some ways making it possible, but restaurants also were reporting significant concerns of potential misrepresentations and unfair business practices. All companies have a right to try to form a business model in a safe, honest and fair marketplace and see if it works. But when the city began investigating, what it found was a variety of potential violations of its consumer protection laws."
The city reached out to all three companies about the possibility of resolution without litigation, but it was only with Uber that settlement talks proved fruitful, Miller said.
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