Chicago took what it described as “the first comprehensive law enforcement actions against meal delivery companies in the United States” by suing Grubhub and DoorDash “for engaging in deceptive and unfair business practices that harm restaurants and mislead consumers.”
The city said in a press release that it has some complaints about how both companies do business. Some of the practices in question, such as advertising delivery options for restaurants that don’t offer them or misleading consumers about how much their order will cost, are common to both platforms. But the city also cited a few practices unique to one platform or the other.
Here’s what Grubhub allegedly did to attract Chicago’s ire:
And here’s what DoorDash was accused of doing:
It seems that Grubhub and DoorDash continuing to engage in these practices during the COVID-19 pandemic helped spur Chicago into action. The city said that half of its 7,500 restaurants were closed—temporarily or permanently—because of the pandemic and that the Federal Reserve estimates that 44,000 restaurant workers lost their jobs as a result.
Yet the ability to order food for delivery led to a massive spike in orders for Grubhub, DoorDash, and other meal delivery services. Chicago said that “year-over-year total orders placed with meal delivery service platforms have more than tripled nationally—from 263 million to 816 million.” (It didn’t provide an estimate for how much orders might have increased within city limits.)
“As we stared down a global pandemic that shuttered businesses and drove people indoors, the defendants’ meal delivery service apps became a primary way for people to feed themselves and their families, as well as support local restaurants,” Chicago Mayor Lori E. Lightfoot said in a statement about the lawsuits. “It is deeply concerning and unfortunate that these companies broke the law during these incredibly difficult times, using unfair and deceptive tactics to take advantage of restaurants and consumers who were struggling to stay afloat.”
Grubhub and DoorDash both contested the City of Chicago’s claims in statements to Eater Chicago. “We are deeply disappointed by Mayor Lightfoot’s decision to file this baseless lawsuit,” Grubhub said. “Every single allegation is categorically wrong and we will aggressively defend our business practices. We look forward to responding in court and are confident we will prevail.”
DoorDash’s statement was even more forceful. “This lawsuit is baseless,” it told Eater Chicago. “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.”
It’s not clear if that line—”cost taxpayers and deliver nothing”—was supposed to be a pun.
