The city of Chicago said Monday it and Uber had come to a settlement worth $10 million in connection with an investigation of the company's Uber Eats and Postmates food delivery apps.
The settlement is about the resolution of claims that the company listed Windy City restaurants on the two apps without consent has breached the city's emergency fee cap ordinance, Chicago announced in a press release. Josh Gold, a spokesman for Uber, told FOX Business that the company is committed to supporting Uber Eats restaurant partners in Chicago and is pleased to put this matter behind us. The city's two-year investigation looked into other advertising-related conduct, including allegations that Uber deceptively advertised that certain merchants were exclusive to or only on the platforms. The settlement agreement states that the company denies the City's contentions. During the COVID 19 epidemic, 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 restrictions were in place.
In September of last year, restaurants that were charged above the 15% threshold received over $3.3 million in payments from Uber in September of last year, according to the city of Chicago.
The city said Uber is paying $2.25 million more to restaurants as part of the settlement agreement because of the emergency fee cap issue.
The city removed all remaining Chicago restaurants that had been listed on Uber's platforms without consent after it contacted it last year, the city said in the release. The company has also agreed not to do so in the future.
Uber will not pay $2.5 million in commissions for Chicago restaurants that it allegedly listed on its delivery platforms without consent, and waiving $500,000 in commissions for them. The city of Chicago must pay $1.5 million in investigation related costs, according to the release.
By January 29, 2023, restaurants that qualify to claim benefits from the Uber settlement must do so by January 29, 2023.
The Illinois Restaurant Association CEO Sam Toia said in a statement that they welcome any relief provided to the independent restaurants that struggled through the epidemic and continue to shoulder the rising costs of doing business.
The city of Chicago sued two other food delivery services, Grubhub and DoorDash, in August 2021 for allegations of unfair and deceptive tactics, claims they denied, according to the Associated Press.
In July 2020, Uber plans to buy Postmates and complete the acquisition before the end of the year.