Dive Brief:
- The city of Chicago reached a $10 million settlement with Uber after the city launched an investigation into whether its food delivery services, Uber Eats and Postmates, listed local restaurants on their platforms without consent from the businesses in violation of a local emergency fee cap ordinance, or carried out “other [unwanted] advertising-related conduct,” the city announced in a press release Monday.
- Uber had previously repaid Chicago restaurants $3.3 million after the city discovered the offenses, the city stated. The money went to restaurants that had been charged commissions exceeding 15%, violating the local emergency fee cap law.
- “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,” said Chicago Mayor Lori Lightfoot in a statement. “There is no room for deceptive and unfair practices.”
Dive Insight:
City leaders continue to grapple with allowing app-based food delivery services to operate while also protecting local businesses and delivery company workers.
Chicago launched a pilot program in October allowing tech companies to partner with restaurants and grocery stores to make food deliveries on city streets via autonomous robots. But it has also cracked down on delivery companies over alleged deceptive practices. Last year, the city claimed DoorDash and Grubhub harmed restaurants and misled consumers through deceptive and unfair business practices, filing two consumer protection lawsuits against the companies.
According to the city, Uber agreed in 2021 to remove all remaining Chicago restaurants listed on the company’s platforms without consent and agreed to stop that practice within the city.
In its settlement with the city, Uber will also pay $2.25 million to Chicago restaurants that were charged commissions over the limits set by the city’s emergency fee cap. It will also pay $2.5 million in commission waivers plus an additional $500,000 to Chicago restaurants that had been listed on its platform without consent and are not currently under contract with Uber. And it will pay $1.5 million to the city to cover the costs and fees of its investigation, the city stated.
Representatives from Uber did not immediately respond to requests for comment Tuesday morning.
