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Chicago sues DoorDash and GrubHub, alleging deceptive business practices

The City of Chicago has filed two separate lawsuits in opposition to DoorDash and GrubHub. While the complaints level to alleged misconduct particular to every company, they broadly accuse DoorDash and GrubHub of using the same set of unfair business practices.

Specifically, the town claims that each DoorDash and GrubHub have persistently marketed supply companies from eating places that by no means consented to a list on their platforms. The metropolis additionally alleges they make use of “bait-and-switch” techniques by utilizing deceptively small supply charges to lure clients earlier than hitting them with numerous different bills on the finish of a transaction. Finally, it says they each disguise the very fact many eating places cost much less for the objects on their menu if you order immediately from them.

DoorDash referred to as the lawsuit “baseless” and a “waste” of taxpayer money. “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,” a spokesperson for the company advised Engadget.

GrubHub echoed the emotions of its competitor. “Every single allegation is categorically wrong, and we will aggressively defend our business practices,” a GrubHub spokesperson mentioned. “We look forward to responding in court and are confident we will prevail.”

In taking the 2 firms to courtroom, the town says it seeks to mandate higher transparency from DoorDash and GrubHub, in addition to monetary restitution for eating places and shoppers damage by their alleged actions.

Separately, the DoorDash lawsuit alleges the company misled clients about the way it was utilizing tricks to pay its supply employees. If that sounds acquainted, it is as a result of DoorDash agreed to pay a $2.5 million settlement towards the tip of 2020 to settle allegations associated to that very same difficulty.

For Chicago, that is the most recent effort by the town to impose extra laws on meals supply apps. In May 2020, it applied a coverage that noticed each DoorDash and GrubHub required to incorporate an itemized breakdown that lists how a lot eating places pay if you order from them utilizing an app.

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