August 27, 2021

Companies say city claims that delivery platforms deceived customers, shortchanged restaurants are ‘baseless’

The City of Chicago on Friday sued DoorDash and Grubhub, alleging the third-party delivery companies deceived customers and used unfair business practices.

The city said the lawsuits were the result of an investigation led by the Chicago’s Business Affairs and Consumer Protection commission and the city’s law department.

Grant Klinzman, a spokesman for Grubhub, said the lawsuit was “baseless.”

“Every single allegation is categorically wrong, and we will aggressively defend our business practices,” Klinzman said on behalf of the Chicago-based Grubhub. “We look forward to responding in court and are confident we will prevail.”

A spokesman for San Francisco-based DoorDash said, "This lawsuit is baseless. It 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. This lawsuit will cost taxpayers and deliver nothing."

Chicago’s lawsuit claimed the third-party platforms advertised delivery services for businesses that have not consented to being listed and concealed lower prices that restaurants offer directly to customers.

The city alleged both platforms used a “bait-and-switch” method to attract customers with low delivery fees, but charged additional fees when orders were about to be placed.

The city seeks more transparency, civil penalties and restitution for consumers and restaurants hurt by the alleged practices.

The complete story can be accessed here.