Uber to pay millions to Chicago restaurants in settlement agreement with city
Uber must pay millions in cash and provide free services to Chicago restaurants as part of a $10 million settlement with the city resolving claims the ride-share company listed restaurants on its UberEats and Postmates platforms without their consent and charged excess commission fees.
The settlement results from a two-year investigation by the city into alleged misconduct on Uber’s meal delivery platforms.
The city said in a news release Monday that after reaching out to the company in 2021, Uber removed all restaurants from its platforms that had been listed without consent and agreed not to list Chicago restaurants without their consent in the future. At that time, Uber also paid $3.3 million to restaurants that were allegedly charged commissions higher than the 15% allowed in the city’s emergency fee cap ordinance.
The company must now pay an additional $2.25 million to restaurants that were allegedly charged commissions in excess of the fee cap and another $500,000 to restaurants listed on its platforms without consent. The company is also being required to cover the $1.5 million cost of the city’s investigation, according to the settlement agreement.
Uber denied any wrongdoing, according to its settlement agreement with the city.
“We are committed to supporting Uber Eats restaurant partners in Chicago and are pleased to put this matter behind us,” said Josh Gold, a spokesperson for Uber.
The city also alleges Uber participated in deceptive advertising practices, such as falsely advertising that certain subscribers would receive free deliveries or that some merchants were “exclusive” to its platforms. Uber denies those allegations and maintains it accurately advertised merchants as being “exclusive” to its platforms, according to the settlement agreement.
Last summer, the city sued both Grubhub and DoorDash in separate lawsuits in Cook County Circuit Court alleging similar deceptive business practices during the pandemic, including listing restaurants without their consent. Litigation is ongoing in both cases, though the DoorDash suit has been moved to federal court.
In statements Monday, spokespeople for DoorDash and Grubhub denied the allegations in the city’s lawsuits.
“This settlement does nothing to change the basic fact of the matter, and we will continue to vigorously defend ourselves before the court,” the DoorDash spokesperson said.
“Grubhub will continue to aggressively defend our business while providing unwavering support to Chicago’s restaurants, diners and drivers,” a Grubhub spokesperson said.
In a statement on the Uber settlement Monday, Chicago Mayor Lori Lightfoot said, “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.”
Restaurants that Uber listed online without consent and that do not have a contract with the company are also eligible to sign up for its delivery and marketing services for free at a valuation of $2.5 million in total, according to the settlement agreement.
The city estimates that “most” nonchain restaurants in Chicago that had a contract with Uber between July and September 2021 were overcharged, said Elisa Sledzinska, spokesperson for the city’s Department of Business Affairs and Consumer Protection, in an email.
Sledzinska said the city estimates more than 2,500 Chicago restaurants are eligible to benefit from the Uber settlement.
Restaurant owners whose businesses were listed on UberEats or Postmates without their consent can visit Chicago.gov/UberSettlement to apply for relief, the city said. The deadline to apply for benefits is Jan. 29.
