The City of Chicago said Monday it and Uber have reached a settlement worth $10 million in an investigation into the company’s food delivery apps Uber Eats and Postmates.
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The settlement marks the resolution of claims that the company listed Windy City restaurants on both apps without consent and violated the city’s emergency fee cap ordinance, Chicago announced in a press release. Josh Gold, spokesperson for Uber, told FOX Business that the company is “committed to supporting Uber Eats’ partner restaurants in Chicago and [is] happy to put this matter behind us.”
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The city’s two-year investigation also looked at “other advertising-related behavior,” including allegations of Uber “misleadingly advertising certain merchants as ‘exclusive’ or ‘only on’ platforms”. The city also accused Uber of misleading advertising regarding free deliveries for Eats Pass and Postmates Unlimited subscribers, according to the settlement agreement.
In the settlement agreement, it is stated that the company “denies the claims of the City”.
During the COVID-19 pandemic, the City of Chicago instituted regulations prohibiting third-party delivery charges from exceeding 15%. Restaurants were hit hard during the height of the COVID-19 pandemic when many restrictions were in place.
Chicago restaurants that would have been charged above the 15% threshold “quickly” received more than $3.3 million in reimbursement from Uber in September of last year, according to the City of Chicago.
As part of the settlement agreement, Uber is also paying restaurants an additional $2.25 million as part of the emergency fee cap issue, the city said.
Uber, when contacted by the city last year, removed “all remaining restaurants in Chicago that had been listed on Uber’s platforms without consent,” the city said in the statement. The company also agreed not to do so in the future.
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The deal calls for Uber to pay an additional $500,000 to Chicago restaurants it would have listed on its consent-free delivery platforms and waive $2.5 million in commissions for them. The company must also pay $1.5 million in investigative costs to the city of Chicago, according to the statement.
Affected restaurants that are eligible and wish to claim benefits from the Uber settlement must do so by January 29, 2023.
“We welcome any relief for independent restaurants that have struggled throughout the pandemic and continue to bear the rising costs of doing business,” Illinois Restaurant Association CEO Sam Toia said in a statement. press release accompanying the announcement.
The city of Chicago sued two other food delivery services, Grubhub and DoorDash, in August 2021 over allegations of “unfair and deceptive tactics,” which they denied, the Associated Press reported.
Uber announced its intention to buy Postmates in July 2020 and completed the acquisition before the end of this year.
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