CHICAGO – (AP) – Chicago officials on Friday accused DoorDash and Grubhub of harming the city’s restaurants and their customers by levying high fees and engaging in other fraudulent practices than the takeaway business for them during the COVID-19 pandemic Industry became essential.
City officials consider their lawsuits against delivery companies to be the largest of their kind brought by a city.
“It is deeply worrying and regrettable that in these incredibly difficult times, these companies have broken the law and used unfair and fraudulent tactics to take advantage of restaurants and consumers who have struggled to stay afloat,” Mayor Lori Lightfoot said in one Explanation.
Representatives of the two companies called the lawsuits filed in the Cook County Circuit Court on Friday “baseless”.
Delivery companies have previously been targeted by law enforcement agencies in other cities and states, but these efforts have been aimed at specific guidelines compared to Chicago’s attacks on many elements of the company’s business.
The San Francisco District Attorney has accused delivery companies of violating California law by designating drivers as contractors. And Washington, DC reached an agreement with DoorDash in 2019 after alleging the company misled customers about how many drivers were being tipped.
The Massachusetts Attorney General filed a lawsuit in July accusing Grubhub of illegally charging restaurants during the pandemic. The state had capped fees for much of 2020.
According to the Chicago lawsuits, both companies are promoting restaurant delivery services without their consent, damaging the company’s reputation if customers are unhappy with the cost or service.
City investigators also found that both companies charge higher prices for items than restaurants that are on their own menu, and collectively charge more fees than customers originally announced.
Taylor Bennett, a spokesman for DoorDash, called the lawsuit “baseless”.
“DoorDash has stood by the city of Chicago throughout the pandemic, waiving restaurant fees, providing $ 500,000 in direct grants, creating strong income opportunities, and providing groceries and other necessities to needy communities,” said Bennett. “This lawsuit will cost taxpayers and deliver nothing.”
Grant Klinzman, a spokesman for Grubhub, said the company was disappointed with Lightfoot’s decision to file the lawsuit.
“Every single allegation is categorically false and we will aggressively defend our business practices,” he said. “We look forward to answering in court and are confident that we will prevail.”
The lawsuits do not state a full monetary penalty that they are seeking. The city is demanding a fine for any violation of the city rules and an order that would prevent them from violating them.
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