Chicago took what it described as “the primary complete regulation enforcement actions in opposition to meal supply firms in the US” by suing Grubhub and DoorDash “for partaking in misleading and unfair enterprise practices that hurt eating places and mislead shoppers.”
Town stated in a press launch that it has some complaints about how each firms do enterprise. A few of the practices in query, similar to promoting supply choices for eating places that do not provide them or deceptive shoppers about how a lot their order will price, are widespread to each platforms. However the metropolis additionally cited a couple of practices distinctive to at least one platform or the opposite.
This is what Grubhub allegedly did to draw Chicago’s ire:
And here is what DoorDash was accused of doing:
It appears that evidently Grubhub and DoorDash persevering with to interact in these practices in the course of the COVID-19 pandemic helped spur Chicago into motion. Town stated that half of its 7,500 eating places have been closed—quickly or completely—due to the pandemic and that the Federal Reserve estimates that 44,000 restaurant employees misplaced their jobs because of this.
But the flexibility to order meals for supply led to an enormous spike in orders for Grubhub, DoorDash, and different meal supply companies. Chicago stated that “year-over-year complete orders positioned with meal supply service platforms have greater than tripled nationally—from 263 million to 816 million.” (It did not present an estimate for a way a lot orders may need elevated inside metropolis limits.)
“As we stared down a worldwide pandemic that shuttered companies and drove individuals indoors, the defendants’ meal supply service apps grew to become a main method for individuals to feed themselves and their households, in addition to help native eating places,” Chicago Mayor Lori E. Lightfoot stated in a press release in regards to the lawsuits. “It’s deeply regarding and unlucky that these firms broke the regulation throughout these extremely troublesome instances, utilizing unfair and misleading techniques to benefit from eating places and shoppers who have been struggling to remain afloat.”
Grubhub and DoorDash each contested the Metropolis of Chicago’s claims in statements to Eater Chicago. “We’re deeply disenchanted by Mayor Lightfoot’s resolution to file this baseless lawsuit,” Grubhub stated. “Each single allegation is categorically mistaken and we are going to aggressively defend our enterprise practices. We look ahead to responding in courtroom and are assured we are going to prevail.”
DoorDash’s assertion was much more forceful. “This lawsuit is baseless,” it instructed Eater Chicago. “It’s a waste of taxpayer sources, and Chicagoans ought to be outraged. DoorDash has stood with the Metropolis of Chicago all through the pandemic, waiving charges for eating places, offering $500,000 in direct grants, creating robust incomes alternatives, and delivering meals and different requirements to communities in want. This lawsuit will price taxpayers and ship nothing.”
It isn’t clear if that line—”price taxpayers and ship nothing”—was purported to be a pun.
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