Uber settles with Chicago for $10 million following investigation
Settlement marks end of two-year investigation
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The city of Chicago said Monday it and Uber had come to a settlement worth $10 million in connection to an investigation of the company's Uber Eats and Postmates food delivery apps.
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The settlement marks the resolution of claims the company listed Windy City restaurants on the two apps without consent and breached the city’s emergency fee cap ordinance, Chicago announced in a press release. Josh Gold, a spokesperson for Uber, told FOX Business the company is "committed to supporting Uber Eats restaurant partners in Chicago and [is] pleased to put this matter behind us."
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The city’s two-year probe looked into "other advertising-related conduct" as well, including allegations Uber "deceptively advertised that certain Merchants were ‘exclusive to’ or ‘only on’ the platforms." The city also accused Uber of misleading advertising related to cost-free deliveries for Eats Pass and Postmates Unlimited subscribers, the settlement agreement showed.
In the settlement agreement, it states the company "denies the City’s contentions."
Signage outside the Uber Technologies headquarters in San Francisco, California, on Tuesday, Feb. 8, 2022. (David Paul Morris/Bloomberg via Getty Images / Getty Images)
The city of Chicago said Monday it and Uber had come to a settlement worth $10 million in connection to an investigation of the company's Uber Eats and Postmates food delivery apps. (REUTERS/David Swanson / Reuters Photos)
During the COVID-19 pandemic, the city of Chicago instituted a regulation barring third-party delivery fees from going above 15%. Restaurants were hit hard during the peak of the COVID-19 pandemic when many restrictions were in place.
Chicago restaurants that were allegedly charged above the 15% threshold "quickly" received over $3.3 million in repayment from Uber in September of last year, according to the city of Chicago.
As part of the settlement agreement, Uber is also paying $2.25 million more to restaurants in connection to the emergency fee cap issue, the city said.
Uber, upon the city contacting it last year, removed "all remaining Chicago restaurants that had been listed on Uber’s platforms without consent," the city said in the release. The company also agreed to not allegedly do so in the future.
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The deal includes Uber paying an additional $500,000 to Chicago restaurants that it allegedly listed on its delivery platforms without consent and waiving $2.5 million in commissions for them. The company must also pay $1.5 million in investigation-related costs to the city of Chicago, according to the release.
Uber driver Karim Amrani sits in his car parked near the San Francisco International Airport parking area. (AP Photo/Jeff Chiu, File / AP Newsroom)
Impacted restaurants that qualify and wish to claim benefits from the Uber settlement must do so by Jan. 29, 2023.
"We welcome any relief provided to the independent restaurants that struggled throughout the pandemic and continue to shoulder the rising costs of doing business," Illinois Restaurant Association CEO Sam Toia said in a statement 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," claims they have denied, the Associated Press reported.
Uber announced plans to buy Postmates in July 2020 and completed the acquisition before the end of that year.
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