Uber Eats Will Pay $10 Million To Chicago In Illegal Practices Settlement
For Uber Eats' 81 million customers (via Business of Apps), the meal delivery service is both convenient and beneficial. However, the service has been hit with numerous lawsuits that argue otherwise. Back in the spring, three consumers sued Uber Eats (along with other apps such as Postmates and DoorDash) for rolling out business practices that allegedly contributed to higher than necessary prices and egregious fees for restaurant patrons, per CNBC.
In 2021, Uber Eats (along with the other meal delivery apps) settled a lawsuit alleging discrimination after the company launched an initiative to support Black-owned businesses during the start of the COVID-19 pandemic, per Fox News. Prior to the settlement, the service even garnered the attention of Ted Cruz. "This will be an expensive exercise in virtue signaling," Cruz tweeted in June 2020. "Because their explicit race-based discrimination is willfully in defiance of federal civil rights laws, Uber Eats will lose EVERY ONE of the lawsuits that are about to be filed."
Uber Eats' latest legal battle involved the city of Chicago, which alleged that the company was intentionally participating in deceptive business practices that negatively impacted local businesses. And now, after two years, they've reached a settlement.
Uber Eats faces a hefty price tag for deception
According to Business Insider, Uber Eats broke local laws by listing Chicago restaurants that weren't in business with it on its app. It also reportedly didn't honor Chicago's 15% cap on delivery fees, which was meant to relieve the financial strain caused by COVID-19. As noted by the publication, these dealings resembled those of DoorDash, which was already deploying such tactics (and was previously sued by In-N-Out). In 2021, Chicago kicked off an investigation to determine the damages Uber Eats caused the local economy.
Now Uber Eats and Chicago have settled things out of court, and the delivery service will shell out around $10 million in damages. Per the City of Chicago website, the money will be split between businesses that Uber Eats overcharged on delivery fees, listed on the app without explicit permission, and who overpaid in commissions. Uber Eats will also pay $1.5 million directly to the city to cover all of the expenses related to the investigations. Any affected business owners can apply for benefits from the settlement until 2023.