The city of Chicago announced an $18 million settlement Friday in its four-year-old lawsuit against DoorDash alleging the food delivery service engaged in deceptive business practices during the pandemic \u2014 at the expense of customers, restaurants and drivers.<\/p>\n
The August 2021 lawsuit filed in Cook County Circuit Court alleged DoorDash leveraged soaring demand for delivery by marking up menu items, listing restaurants on the platform without consent and adding a $1.50 \u201cChicago Fee\u201d to every order in response to a city-imposed emergency cap on commissions.<\/p>\n
Under the terms of the settlement, DoorDash will pay $3.25 million to restaurants listed without consent that are still not on the platform and issue $5.8 million in delivery and marketing credits to those that have since joined.<\/p>\n
To compensate eligible Chicago customers, DoorDash will provide $4 million in credits for food delivery orders beginning Jan. 28.<\/p>\n
DoorDash will also pay $500,000 to drivers delivering food orders in Chicago as of September 2019, when the company ended its practice of using tips to subsidize driver pay.<\/p>\n
\u201cThis settlement demonstrates Chicago\u2019s commitment to standing up for workers and small businesses while maintaining a fair and honest marketplace,\u201d Mayor Brandon Johnson said in a news release Friday. \u201cOur hospitality industry is critical to our economy, and it works best when companies play by the rules, workers are treated fairly, and consumers see transparent pricing.<\/p>\n
In August 2021, the Lightfoot administration filed separate lawsuits<\/a> against DoorDash and rival food delivery service Grubhub in the wake of an investigation into alleged deceptive business practices by both during the pandemic.<\/p>\n The Grubhub lawsuit is ongoing in Cook County Circuit Court, a city spokesperson said Friday.<\/p>\n While not admitting wrongdoing, California-based DoorDash, the nation\u2019s largest food delivery service, said Friday it has ended the practices cited in the lawsuit, including eliminating the Chicago Fee, ensuring all tips go 100% to the drivers and removing all non-partner restaurants from the platform.<\/p>\n \u201cWe\u2019re pleased to have settled a years-old lawsuit with the City of Chicago,\u201d a DoorDash spokesperson said in a statement. \u201cTo be clear, this settlement isn\u2019t an admission of wrongdoing and the allegations in this lawsuit focus on business practices that no longer exist. We\u2019re glad to put this behind us.\u201d<\/p>\n DoorDash had added the $1.50 Chicago Fee to orders within the city limits after a 15% commission cap was imposed on food delivery services during the pandemic. In its separate lawsuit, the city alleged Grubhub<\/a> also violated its emergency cap of 15% on restaurant commissions.<\/p>\n A Grubhub spokesperson did not immediately respond to a request for comment Friday.<\/p>\n In December, Grubhub agreed to pay $25 million<\/a> to settle a lawsuit brought by the Federal Trade Commission and Illinois Attorney General Kwame Raoul\u2019s office over deceptive business practices.<\/p>\n