Chicago Reaches $18 Million Deal with DoorDash Over Deceptive Practices
The city of Chicago has agreed to a $18 million settlement with food delivery giant DoorDash over allegations that the company engaged in deceptive practices with restaurants, customers, and delivery drivers during the COVID-19 pandemic.
According to the agreement, DoorDash will provide $4 million in credits to eligible users on its platform, $3.25 million to restaurants listed without consent, $5.8 million in delivery commission and marketing credits to participating restaurants, and $500,000 to drivers who were delivering orders as of September 2019.
The city's complaint alleged that DoorDash used "deceptive" practices, including not disclosing the full cost of its service to customers, imposing a "Chicago Fee," and failing to disclose menu prices on the app. The company was also accused of misleading consumers into believing they were tipping drivers directly when in fact it was using tips to subsidize driver pay.
A DoorDash spokesperson maintained that the allegations have been resolved for over six years, and the current settlement does not constitute an admission of wrongdoing. However, the terms of the agreement suggest that the company has acknowledged some level of wrongdoing and is willing to make amends.
The settlement comes as part of a broader effort by Illinois Attorney General Kwame Raoul's office to hold companies accountable for their treatment of workers and small businesses. In November, DoorDash agreed to an $11.25 million settlement with Raoul's office over similar complaints about delivery drivers' tips.
Mayor Brandon Johnson welcomed the settlement, saying it demonstrates the city's commitment to standing up for workers and small businesses while maintaining a fair and honest marketplace.
The city of Chicago has agreed to a $18 million settlement with food delivery giant DoorDash over allegations that the company engaged in deceptive practices with restaurants, customers, and delivery drivers during the COVID-19 pandemic.
According to the agreement, DoorDash will provide $4 million in credits to eligible users on its platform, $3.25 million to restaurants listed without consent, $5.8 million in delivery commission and marketing credits to participating restaurants, and $500,000 to drivers who were delivering orders as of September 2019.
The city's complaint alleged that DoorDash used "deceptive" practices, including not disclosing the full cost of its service to customers, imposing a "Chicago Fee," and failing to disclose menu prices on the app. The company was also accused of misleading consumers into believing they were tipping drivers directly when in fact it was using tips to subsidize driver pay.
A DoorDash spokesperson maintained that the allegations have been resolved for over six years, and the current settlement does not constitute an admission of wrongdoing. However, the terms of the agreement suggest that the company has acknowledged some level of wrongdoing and is willing to make amends.
The settlement comes as part of a broader effort by Illinois Attorney General Kwame Raoul's office to hold companies accountable for their treatment of workers and small businesses. In November, DoorDash agreed to an $11.25 million settlement with Raoul's office over similar complaints about delivery drivers' tips.
Mayor Brandon Johnson welcomed the settlement, saying it demonstrates the city's commitment to standing up for workers and small businesses while maintaining a fair and honest marketplace.