Grubhub and DoorDash sued for allegedly deceiving customers

Grubhub and DoorDash have received two lawsuits from the City of Chicago for allegedly deceiving customers and using unfair business practises.

Restaurant owners on the platforms have long claimed that the delivery giants advertise their delivery services without consent while conceal lower prices from restaurants that offer deliver to customers outside of the apps.

Both of the suits claims that both of the platforms use a “bait-and switch” method of attracting customers whereby they advertise low delivery fees only to charge additional ones during the checkout process.

The city claimed DoorDash misled customers about the use of tips sent by users.

It has also alleged that Grubhub shared telephone numbers for customers to connect with restaurants, however would then charge the restaurants a commission for calls placed through those numbers, even when the call didn’t culminate in a food order.

Just Eat-owned Grubhub have also been accused of creating “imposter” websites to lure customers to its platform, which the company believes does not break any laws but has ended the practice.

Both DoorDash and Grubhub have disputed the city’s claims, calling them “baseless”.

READ MORE: Just Eat concludes $7.3bn Grubhub acquisition

A DoorDash representative said the platform “has stood with the City of Chicago throughout the pandemic, waiving fees for restaurants, providing $500,000 in direct grants, creating strong earning opportunities, and delivering food and other necessities to communities in need.”

DoorDash stopped adding new restaurants that it doesn’t have agreements with on its app as well as announcing it will remove restaurants that don’t want to be listed within 48 hours of being notified.

Grubhub also does the same for non-partner restaurants when asked to do so and says that only a small number of restaurants have requested to be removed from the platform so far.

The platform denies the claims made by the city and has said its contracts it has with restaurants require them to offer customers similar prices to elsewhere.

“Every single allegation is categorically wrong and we will aggressively defend our business practices,” Grubhub said in a statement.

“We look forward to responding in court and are confident we will prevail.”

The city is looking to mandate more transparency, civil penalties and reparations for consumers and restaurants hurt by the alleged practices.

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