Uber Eats will pay $10 millions to list Chicago restaurants without consent

Uber Eats $10 million settlement agreement

Uber reached a $10 million settlement agreement with the City of Chicago. The company was accused of listing local restaurants on the Uber Eats or Postmates food delivery apps without their consent and for charging excessive commission fees.

According to Cohen Milstein Sellers & Toll (a law firm representing the city), more than $5 million will be used to pay damages to Chicago restaurants. $1.5 million will be used to cover costs incurred during Chicago’s two-year investigation.

Chicago restaurants without consent

Chicago is not the only city that has dealt with food delivery services listing restaurants without their consent. This isn’t even Postmates’ first offense. Many apps, such as DoorDash, Grubhub, and Seamless have been accused of pulling online restaurant menus and placing them on their own platforms. Customers could place orders through the apps and couriers would order food from the restaurant. Restaurants claim that this practice can lead to customers ordering items that don’t exist anymore or being incorrectly priced, cancellations of orders, and a lack of control over food handling.

“Today’s settlement reflects City’s commitment towards creating a fair, honest marketplace that protects both consumers as well as businesses from illegal conduct,” Mayor Lori Lightfoot said in a statement. “Chicago’s restaurateurs and workers are hard at work to earn their reputations and provide quality service for our citizens and visitors. Our economy is dependent on the hospitality industry. It is vital that there is transparency and fair pricing. There are no opportunities for unfair or deceptive practices.

Uber’s claims mirror separate lawsuits against Grubhub and DoorDash last year, which alleged similar deceptive business practices. Both cases are ongoing.

According to a statement by the city, Chicago reached out Uber last September when it found the illegal conduct. The ride-hailing company responded by paying $3.3 million to Chicago restaurants who were charged commissions exceeding 15% for violating the emergency fee cap ordinance. It also removed all non-consensually-listed restaurants from the platform and agreed to not list Chicago restaurants again without permission.

Uber Eats will pay $2.25 million more to restaurants

Uber will pay $2.25 million more to restaurants that were allegedly subject to higher commissions than the fee cap. $500,000 for restaurants that Uber lists on its platforms without consent; $2.5 million for restaurants that Uber does not currently contract with; $2.5 million in waivers of commissions for affected restaurants.

Sam Toia, President and CEO of Illinois Restaurant Association said in a statement, “We welcome any relief offered to the independent restaurants which struggled through the pandemic”

Uber is also accused of deceptive advertising practices, including falsely advertising merchants as “exclusive” on its platform and promising free delivery to certain subscribers.

According to the settlement, Uber has denied any wrongdoing. TechCrunch spoke with Josh Gold, an Uber spokesperson:

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

According to the Chicago Tribune, more than 2,500 Chicago restaurants could be eligible for the Uber settlement. By January 29, restaurant owners can apply online for relief.