What Led Chicago to Sue DoorDash and Grubhub
On August 27, the city of Chicago filed twin lawsuits against third-party delivery companies DoorDash and Grubhub, accusing them of deceptive business practices that take advantage of restaurants, customers, and even employees. While the complaints weren’t new (restaurant owners have been raising concerns about fees, customer service, and unethical practices for years) the lawsuits were stunning moves. In March 2020, Chicago-based Grubhub CEO Matt Maloney appeared with Mayor Lori Lightfoot at City Hall. The mayor touted third parties as salvation for restaurants who needed takeout and delivery sales more than ever after the suspension of indoor dining.
As cities like San Francisco and New York moved to enact fee caps, Chicago lawmakers waited until November 2020 to enact their own pandemic-era fee cap, and was only after health department officials reported multiple waves of COVID-19 and after in October 2020 when Chicago suspended indoor dining for the second time.
The city’s reluctance to take action seemed mired in a fear of losing a lawsuit. Grubhub and DoorDash filed a lawsuit against San Francisco in July over a permanent fee cap. The council also faced objections from lobbyists ready to challenge the notion that the government shouldn’t be in a position to regulate their businesses to this extent. Chicago’s city council has since extended the cap until December.
Many independent restaurant owners have hailed the lawsuits. They’ve said the delivery companies have ignored their concerns and only respond to public shaming in the form of a viral social media post or if local lawmakers threaten regulations.
Larger restaurant chains have little problem with paying the fees, and online portals that aggregate menus do hold value for restaurants and customers alike when properly executed. Both DoorDash and Grubhub fiercely deny the city’s allegations detailed in the lawsuit. Court dates for both lawsuits are pending and should be announced later in September. The city also says it may file additional lawsuits against other companies in the future. A lot has changed since that March 2020 meeting headlined by Lightfoot and Maloney.
Read all of Eater Chicago’s coverage to soak up the background on what moved the city to file the first comprehensive lawsuits against third-party delivery companies in the country.