Uber has agreed to pay a $10 million settlement with the City of Chicago in the US for listing restaurants in the Uber Eats and Postmates food delivery apps without the restaurants’ consent and violating the city’s fee cap on third-party delivery services by charging an excess commission. The settlement comes following a two-year probe into the company’s practices. Over 2,500 Chicago restaurants are estimated to be eligible to benefit from the settlement, as per a TechCrunch report.
“Today’s settlement reflects the City’s commitment to creating a fair and honest marketplace that protects both consumers and businesses from unlawful conduct,” TechCrunch quoted Mayor Lori Lightfoot as saying. “Chicago’s restaurant owners and workers work diligently to build their reputations and serve our residents and visitors. That’s why our hospitality industry is so critical to our economy, and it only works when there is transparency and fair pricing. There is no room for deceptive and unfair practices,” he added.
In the investigation, it was found that Uber Eats and Postmates charged restaurants commission fees of over 15 percent. From the settlement, more than $5 million will go toward paying damages back to affected Chicago restaurants, and $1.5 million will go to Chicago for the costs incurred during the city’s two-year investigation into the matter. Uber removed all restaurants added to its meal delivery platforms without permission last year.
In addition, Uber will pay $2.25 million to restaurants that were allegedly charged commissions higher than the fee cap and $500,000 to restaurants that Uber listed on its platforms without consent. It will also pay $2.5 million in commission waivers to affected restaurants.
Chicago also is suing GrubHub and DoorDash for some similar practices. Other apps including Seamless, Grubhub, and DoorDash are also facing allegations of putting restaurant menus on their own platform without consent. Many times, the menu posted on these apps is outdated which creates confusion among customers. And when a customer made an order, the app’s couriers would place the order on the customer’s behalf.
