uber eats to pay millions for listing chicago restaurants without consent

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

Over $5 million will go toward paying damages back to Chicago restaurants that were affected, and $1.5 million will go to Chicago for the costs incurred during the city’s two-year investigation into the matter, according to Cohen Milstein Sellers & Toll, a law firm that represented the city.

Chicago’s not the first city to deal with food delivery apps listing restaurants without their permission, and this isn’t Postmates’ first offense. Several apps, including Seamless, Grubhub and DoorDash, have been accused of pulling restaurant menus listed online and putting them on their own platforms. When a customer ordered through the apps, couriers would place orders to restaurants on the customer’s behalf. Restaurants have said the practice leads to customers ordering menu items that no longer exist or aren’t priced correctly, cancelled orders and lack of control over food handling and delivery experience.

“Today’s settlement reflects the City’s commitment to creating a fair and honest marketplace that protects both consumers and businesses from unlawful conduct,” said Mayor Lori Lightfoot in a statement. “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.”

The claims against Uber mirror separate lawsuits from Chicago against Grubhub and DoorDash last summer that alleged similar deceptive business practices. Both cases are ongoing.

Last September, Chicago reached out to Uber when it discovered the unlawful conduct, according to a statement from the city. The ride-hail company responded by repaying $3.3 million to Chicago restaurants that had been charged commissions over 15% in violation of the city’s emergency fee cap ordinance, removed all non-consensually listed restaurants from the platform and agreed not to list Chicago restaurants without permission in the future.

Under Monday’s settlement, Uber will pay an additional $2.25 million to restaurants that were allegedly charged commissions higher than the fee cap; $500,000 to restaurants that Uber listed on its platforms without consent and that don’t currently contract with Uber; and $2.5 million in commission waivers to affected restaurants.

“We welcome any relief provided to the independent restaurants that struggled throughout the pandemic and continue to shoulder the rising costs of doing business,” said Sam Toia, president and CEO of the Illinois Restaurant Association, in a statement.

The city also alleges that Uber participated in deceptive advertising practices like falsely advertising some merchants were “exclusive” to its platform and that certain subscribers would receive free deliveries.

Uber denied any wrongdoing, according to the settlement. Josh Gold, an Uber spokesperson, told TechCrunch:

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

More than 2,500 Chicago restaurants are estimated to be eligible to benefit from the Uber settlement, according to the Chicago Tribune. Restaurant owners can apply for relief online by January 29.

TECH NEWS RELATED

The need-to-know terms for business leaders in 2023

The past year has given rise to a multitude of new terms used to describe different employee behaviours that have appeared since the pandemic, from ‘quiet constraint’ to ‘desk bombing’ and more. 

View more: The need-to-know terms for business leaders in 2023

Microsoft to acquire 4% stake in London Stock Exchange Group as part of 10-year cloud partnership

Microsoft is to acquire a 4% stake in the London Stock Exchange Group (LSEG), the company that owns the London Stock Exchange as well as a several other businesses including financial market data company Refinitiv which LSEG acquired from a Blackstone/Thomson Reuters consortium last year for $27 billion. Microsoft’s ...

View more: Microsoft to acquire 4% stake in London Stock Exchange Group as part of 10-year cloud partnership

Yep! Launches to Provide Multi-Format Alcohol Service with AI-Powered Personal Recommendations

Yep! , a multi-format alcohol service, today announced its launch in London. The platfo rm features personal AI-based recommendations and predictive stock supply.    

View more: Yep! Launches to Provide Multi-Format Alcohol Service with AI-Powered Personal Recommendations

Statzon Raises a €400,000 Seed Round to Expand to New Industry Verticals

A Finnish market intelligence startup, Statzon , has announced that it has successfully raised a 400K EUR seed funding round. The round includes equity funding from investors as well as an R&D loan from Business Finland.

View more: Statzon Raises a €400,000 Seed Round to Expand to New Industry Verticals

MC Exclusive: DoT may soon make it mandatory for telcos to share KYC details with OTTs

Representative image. (Image: AFP) The Department of Telecommunications (DoT) is considering creating an obligation on telcos to share know-your-customer details of their users with over-the-top (OTT) communication platforms like WhatsApp and Signal, people aware of the development told Moneycontrol. “Such a provision will help OTTs display the verified name ...

View more: MC Exclusive: DoT may soon make it mandatory for telcos to share KYC details with OTTs

Nigerian startup Taeillo raises funding to scale its online furniture e-commerce platform

Individuals or businesses buying furniture in Africa can purchase from local furniture stores or global furniture retailers like IKEA. But both options have pros and cons; for the latter, local furniture stores may lack the quality that clients need, while global retailers, in addition to taking several months to ...

View more: Nigerian startup Taeillo raises funding to scale its online furniture e-commerce platform

Robco links up with $14M led by Sequoia to bring modular robotics to industrial SMBs

After years of outsourcing and offshoring manufacturing to countries with cheaper labour and bigger production ecosystems, the U.S. and Europe are on a mission to bring some of that industrial work back to its own shores. Today, a startup that believes it can help with that shift is announcing ...

View more: Robco links up with $14M led by Sequoia to bring modular robotics to industrial SMBs

Doglapan book review: An angry and indignant Ashneer Grover doesn’t hold back in this tell-all memoir

“If you choose to work with your spouse, there should be no hesitation in designating them as co-founders as well as giving them a seat on the board” “It is important to remember that the investor is just another vendor” “To my mind, the concept of a related-party transaction ...

View more: Doglapan book review: An angry and indignant Ashneer Grover doesn’t hold back in this tell-all memoir

Tiger Global startup investments drop 70% in 11 months of 2022 as funding winter worsens

Uber sues NYC Taxi & Limo Commission to block rate increase for drivers

Twitter Blue to relaunch with actual verification process, higher price for Apple users

The one slide 99% of founders get wrong when fundraising

There are a lot of reasons to be excited about Canada’s venture market

Avarni is building a comprehensive dataset to analyze supply chain emissions 

Fintech giants face uphill battle

5 lessons we’ve learned from building a venture fund from scratch

Another week of layoffs, executive departures and AI-generated everything

This Week in Apps: Apple App Store’s new pricing, Twitter app makers shift to Mastodon, debate over Lensa AI

Edtech’s brightest are struggling to pass

Hybrid pricing can help app developers better monetize their apps

OTHER TECH NEWS

Top Car News Car News