Uber will pay the City of Chicago $10 million for overcharging customers and listing restaurants in the Uber Eats and Postmates APP without restaurants’ permission.
Part of the settlement will be given to Chicago to reimburse the $1.5 million costs of the investigation, and over $5 million will be given to restaurants in damages. Restaurants have said that listing their menu without permission leads to customers ordering meals that are no longer available, being charged incorrectly, and canceling orders.
In a statement, Mayor Lori Lightfoot said,
Today’s settlement reflects the City’s commitment to creating a fair and honest marketplace that protects both consumers and businesses from unlawful conduct. Chicago’s restaurant owners and workers work diligently to build their reputations and serve our residents and visitors. That’s why our hospitality industry is so critical to our economy, and it only works when there is transparency and fair pricing. There is no room for deceptive and unfair practices.
Uber Eats Potentially Not the Only Culprit
Uber Eats isn’t the only food delivery platform accused of unethical and illegal business practices. Grubhub and DoorDash both have ongoing lawsuits with the state of Chicago.
They’re alleged to have taken advantage of struggling restaurants by increasing listing fees, overcharging menu items, and charging over the 15% cap on the delivery commission during the pandemic. It’s also alleged that DoorDash took tips given to delivery drivers.
In September, Uber paid $3.3 million to restaurants in Chicago for not abiding by the 15% commission cap and unlisted restaurants that were uploaded to the platform without permission. The latest settlement seems to be the last of the matter, with another:
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- $2.25 million going to restaurants that were charged higher commissions
- $500,000 going to restaurants listed without permission, and
- £2.5 million going to restaurants affected by Uber’s unlawful conduct.
It’s estimated that 2,500 Chicago restaurants could be eligible to receive money from the settlement. Here’s what a Spokesperson for Uber Eats has said:
We are committed to supporting Uber Eats restaurant partners in Chicago and are pleased to put this matter behind us.
Customers still need to be wary when using delivery platforms. Last week two restaurants in Chicago said that their listings were taken down and replaced with imposter restaurants on DoorDash.
When customers placed an order, they were charged, and the imposters received the funds, but the food was never delivered. The restaurants allege that DoorDash didn’t check with them when changes to the listing were made.
Both DoorDash and Grubhub deny wrongdoing and have said that they’ll fight the lawsuits in court.
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