Uber Eats will pay $10 million for listing Chicago restaurants without permission
Apps such as Grubhub and DoorDash have also been accused of putting up restaurant menus listed online on their pages.
A $10 million settlement has been reached between the City of Chicago and Uber after the latter listed local restaurants in the Uber Eats and Postmates food delivery apps without the restaurants’ consent, besides charging excess commission fees. Cohen Milstein Sellers & Toll, the law firm that represented the city, said that over five million dollars will go to the affected restaurants, while $1.5 million will go towards the costs incurred by the city during the investigation.
“Today’s settlement reflects the City’s commitment to creating a fair and honest marketplace that protects both consumers and businesses from unlawful conduct,” said Mayor Lori Lightfoot in a statement.
“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.”
This isn't the first incident of this type. Apps such as Grubhub and DoorDash have also been accused of putting up restaurant menus listed online on their pages. They also place the order on the customer's behalf. Restaurants say this leads to people ordering things that aren't available any more, besides there being a price difference in some cases. Several orders get cancelled because of the issue.
Lawsuits against Grubhub and DoorDash are ongoing.
After Chicago discovered the malpractice, it approached Uber in September last year, a city statement said. The company repaid $3.3 million to Chicago restaurants that were charged commissions over 15 per cent. It also dropped the restaurants in question from its platform and said it won't list any Chicago restaurants without permission.
Following Monday's order, Uber will pay an additional $2.25 million to restaurants that were asked to shell out higher commissions than the fee cap. $500,000 will be given to restaurants that were listed without consent and $2.5 million in commission waivers to affected restaurants.
(With inputs from agencies)
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