Uber Eats to pay millions for listing Chicago restaurants without consent • TechCrunch

Uber has agreed to a $10 million settlement with the City of Chicago for listing local restaurants in food delivery apps Uber Eats and Postmates without the restaurant’s consent, as well as charging excess commissions level.

More than $5 million will be used to compensate affected Chicago restaurants and $1.5 million will go to Chicago for costs incurred during the city’s two-year investigation. town on the matter, said Cohen Milstein Sellers & Toll, a law firm. represent the city.

Chicago isn’t the first city to tackle Food delivery app that lists restaurants without their permission and this is not Postmates’ first offense. Several apps, including Seamless, Grubhub, and DoorDash, have allegedly taken restaurant menus listed online and put them on their own platforms. When a customer places an order through the app, the couriers will place the order on behalf of the customer to the restaurant. Restaurants say this practice leads to customers ordering menu items that no longer exist or aren’t priced correctly, order cancellations, and a lack of control over food handling and delivery.

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

Complaints against Uber reflect separate lawsuits from Chicago against Grubhub and DoorDash last summer accused similar deceptive business practices. Both cases are ongoing.

Last September, Chicago contacted Uber when they discovered illegal behavior, according to a statement from the city. The ride-hailing company responded by refunding $3.3 million to Chicago restaurants that were charged over 15% commissions for violating the city’s emergency fee-limiting ordinance, removing all restaurants listed without consent from the platform and agree not to list restaurants in Chicago without permission in the future.

Under Monday’s settlement, Uber will pay an additional $2.25 million to restaurants accused of charging commissions above the fee ceiling; $500,000 for restaurants that Uber has listed on its platform without consent and is not currently under contract with Uber; and $2.5 million in commission-free payments to affected restaurants.

Sam Toia, president and chief executive officer of the Illinois Restaurant Association, said in a statement: “We welcome any relief provided to independent restaurants that have struggled throughout the year. pandemic and continue to shoulder the growing costs of doing business.

The city also alleges that Uber engaged in deceptive advertising practices such as falsely advertising that certain sellers are “exclusive” on their platform and that certain subscribers will be Free delivery.

Uber denies any wrongdoing, according to the resolution. Josh Gold, a spokesperson for Uber, told TechCrunch:

“We are committed to supporting Uber Eats restaurant partners in Chicago and are happy to work this out behind our back.”

More than 2,500 restaurants in Chicago are estimated to be eligible to benefit from Uber’s deal. Chicago Court. Restaurant owners can apply for relief Online before January 29.


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