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Uber Eats Agrees To $10 Million Settlement After Charging Too Much And Listing Chicago Restaurants Without Permission

Restaurant owners will automatically get refunds for overcharged commission fees, which could be hundreds or thousands of dollars for some eateries, city officials said.

The city and UberEats reached a settlement in a case alleging it overcharged fees and listed restaurants without permission.
Colin Boyle/Block Club Chicago
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CHICAGO — Uber will pay the city and local restaurants about $10 million to settle a probe into the company’s practice of posting restaurants on Postmates and UberEats without their permission, as well as violations of the city’s fee cap on third-party delivery services.

City officials announced the settlement Monday following a two-year investigation.

That investigation found Uber Eats and Postmates charged restaurants commission fees over 15 percent. The city implemented caps on these kinds of fees in 2020 and again in 2021. Restaurant owners have protested those charges and urged diners to order directly through their eateries as they’ve struggled through the pandemic.

Uber repaid more than $3.3 million to Chicago restaurants in September 2021 after city investigators discovered the illegal fees, officials said.

Uber will pay another $2.25 million to restaurants charged more than the 15 percent fee cap as part of the settlement, officials said.

Uber also will pay $500,000 to restaurants that were listed on its platforms without their consent and provide another $2.5 million in commission waivers, city officials said.

Uber removed any restaurant added to its meal delivery platforms without permission in 2021 and agreed to discontinue that practice, city officials said.

Uber, which owns Postmates and Uber Eats, cooperated with a city investigation into the matter and agreed to the settlement, according to a news release. The company also will pay the city $1.5 million to cover costs of its investigation.

“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,” Mayor Lori Lightfoot said in a statement. “There is no room for deceptive and unfair practices.” 

The settlement comes amid broader pushback to the common practice of posting menus on third-party platforms whether a restaurant owner consented to it or not.

The city also is suing GrubHub and DoorDash for some of the same practices.

One Edgewater restaurant owner told Block Club that DoorDash added his eatery with outdated menus, which confused customers.

DoorDash considered the move a trial run on the platform and restaurants could opt out anytime, a company spokesperson previously said. DoorDash stopped adding restaurants without their consent in November 2020, a spokesperson said.

Legislators introduced a state bill to block the practice in Illinois in 2021. Gov. JB Pritzker signed the Fair Food and Retail Delivery act in June. The law goes into effect Jan. 1. California and Seattle have passed their own versions of the law, according to Eater.

Restaurant owners whose eateries were listed on Uber Eats or Postmates without their consent can go to the city’s website for instructions on how to submit a claim for the settlement benefits. Owners have until Jan. 29 to accept the offer.

Restaurants charged more than the 15 percent commission fee in 2021 will automatically get reimbursed by Uber, city officials said. Some restaurants already have received money back through the $3.3 million repayment in September 2021, city officials said.

Restaurant owners still owed money from illegal fees do not have to take any action, city officials said. The payments will vary depending on how much a restaurant was overcharged, according to city officials. All restaurants will get at least $200, some will get far more, with the most overcharged restaurant getting more than $10,000, according to city officials.

More information for restaurant owners is here.

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