The city of Chicago and Uber have settled for $10 million over allegations that Uber included eateries in its Uber Eats and Postmates food delivery apps without permission and overcharged restaurants for commissions.
According to Cohen Milstein Sellers & Toll, the law firm that represented the City of Chicago in this matter, over $5 million will be paid back to affected restaurants in Chicago, and $1.5 million will go to Chicago to cover the costs incurred during the City’s two-year investigation into the matter.
Neither Postmates nor Chicago are the first cities to deal with meal delivery apps listing eateries without their authorization
Seamless, Grubhub, and DoorDash are just a few of the applications that have been accused of scraping internet restaurant menus and integrating them into their own apps.
The couriers would then place the orders with the respective eateries on behalf of the customer.
Businesses have complained that this leads to customers buying out-of-stock or incorrectly priced things, orders being canceled, and them having no say over how their food is prepared, stored, and delivered.
Mayor Lori Lightfoot issued a statement saying, “Today’s settlement shows the City’s commitment to building a fair and honest marketplace that protects both consumers and businesses from unlawful conduct.”
Owners and staff at Chicago restaurants work hard to earn positive reviews from locals and tourists alike.
That’s why honest and reasonable pricing in the hotel business is so essential to our economy. Con artists and shady businessmen have no place here.
Lawsuits filed against Grubhub and DoorDash in Chicago last summer on similar grounds parallel those filed against Uber.
The investigations into both situations are still underway at this time. The mayor of Chicago released a statement saying that the city contacted Uber about the illegal activity back in September.
The ride-hailing service agreed to stop listing Chicago restaurants without permission, refunded $3.3 million to those who had been charged commissions above 15% in violation of the city’s emergency fee cap ordinance, and removed all restaurants that had been listed without their knowledge or consent.
Uber has agreed to pay an extra $2.25 million to restaurants that were improperly charged commissions in excess of the fee cap, as well as $500,000 to restaurants that Uber listed on its platforms without consent and that do not currently contract with Uber, and $2.5 million in commission waivers to affected restaurants, all as part of a settlement announced on Monday.
Illinois Restaurant Association CEO Sam Toia said in a statement, “We applaud any help afforded to the independent eateries that struggled throughout the pandemic and continue to endure the increased costs of doing business.”
Furthermore, the city claims that Uber engaged in misleading advertising by falsely claiming that some businesses were “exclusive” to its platform and that select subscribers would receive free deliveries.
The agreement states that Uber did nothing illegal. Uber’s representative Josh Gold told
“We are happy this issue has been resolved and remain dedicated to helping Chicago’s Uber Eats restaurant partners succeed.”
According to the Chicago Tribune, the Uber deal might help over 2,500 Chicago eateries. Before January 29th, restaurant owners can request aid online.
Source: TechCrunch
