Uber Eats will pay millions to list Chicago restaurants without consent

Uber has agreed to a $10 million settlement with the city of Chicago for listing local restaurants on food delivery apps Uber Eats and Postmates without the restaurants’ consent and charging additional commissions.

More than $5 million will go to pay damages back to affected Chicago restaurants, and $1.5 million will go to Chicago for costs incurred during the city’s two-year investigation into the matter, according to Cohen Milstein Sellers & Toll, a law firm , which represented the city.

Chicago isn’t the first city we’ve tackled food delivery apps listing restaurants without their permission, and this isn’t Postmates’ first violation. Several apps, including Seamless, Grubhub and DoorDash, have been accused of downloading restaurant menus listed online and placing them on their own platforms. When a customer orders through the apps, couriers place orders at the restaurants on behalf of the customer. Restaurants say the practice results in customers ordering menu items that no longer exist or aren’t priced correctly, canceled orders and a lack of control over food handling and delivery.

“Today’s settlement reflects the city’s commitment to creating a fair and honest marketplace that protects both consumers and businesses from illegal behavior,” Mayor Lori Lightfoot said in a statement. “Chicago restaurant owners and workers work hard to build their reputation and serve our residents and visitors. This is why our hospitality industry is so critical to our economy and only works when there is transparency and fair pricing. There is no room for fraudulent and unfair practices.”

The lawsuits against Uber mirror separate cases from Chicago against Grubhub and DoorDash last summer, which claims similar deceptive business practices. Both cases are ongoing.

Last September, Chicago contacted Uber when it discovered the illegal behavior, according to a city statement. The ride-hailing company responded by paying $3.3 million to Chicago restaurants that were charged commissions of more than 15% in violation of the city’s emergency fee ordinance, removing all restaurants included without consent from the platform and agreeing to does not list restaurants in Chicago without permission in the future.

Under Monday’s settlement, Uber will pay an additional $2.25 million to restaurants that were allegedly charged commissions higher than the fee cap; $500,000 for restaurants that Uber has listed on its platforms without consent and that do not currently have a contract with Uber; and $2.5 million in commission waivers for affected restaurants.

“We welcome any relief provided to independent restaurants that have struggled during the pandemic and continue to bear the rising cost of doing business,” said Sam Toya, president and CEO of the Illinois Restaurant Association, in a statement.

The city also alleged that Uber engaged in deceptive advertising practices such as falsely advertising certain merchants as “exclusive” to its platform and that certain subscribers would receive free deliveries.

Uber has denied any wrongdoing, according to the settlement. Josh Gold, a spokesperson for Uber, told TechCrunch:

“We are committed to supporting Uber Eats restaurant partners in Chicago and are pleased to put this matter behind us.”

More than 2,500 restaurants in Chicago are estimated to be eligible to take advantage of the Uber agreement, according to Chicago Tribune. Restaurant owners can apply for relief online until January 29.

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