r/business • u/pecika • 18d ago
Chicago sues DoorDash and GrubHub, alleging deceptive business practices
https://www.engadget.com/chicago-sues-doordash-grubhub-210424254.html51
u/TheRomanDivider 18d ago
Specifically, the city claims that both DoorDash and GrubHub have consistently advertised delivery services from restaurants that never consented to a listing on their platforms. The city also alleges they employ "bait-and-switch" tactics by using deceptively small delivery fees to lure customers before hitting them with various other expenses at the end of a transaction. Finally, it says they both hide the fact many restaurants charge less for the items on their menu when you order directly from them.
DoorDash called the lawsuit "baseless" and a "waste" of taxpayer money. "DoorDash has stood with the City of Chicago throughout the pandemic, waiving fees for restaurants, providing $500,000 in direct grants, creating strong earning opportunities and delivering food and other necessities to communities in need," a spokesperson for the company told Engadget.
36
u/_DirtyYoungMan_ 18d ago
These arrogant pricks. They do exactly that which they are accused of. Our restaurant in LA, for months, kept hounding them to take us off their website but they never did. Not to mention the not-up-to-date menu and we had non-stop customer complaints about this and that missing or being wrong. Finally we flat out refused to fulfill orders from them (it was easy; they never came directly to us, the driver would pull out their phone with the order on it), after a few irate drivers who we told to complain to corporate they just stopped showing up. We offer order online and pick-up only now and the problems have gone away.
Fuck DD, GrubHub and UberEats.
3
u/RocketScient1st 18d ago
So if your restaurant doesn’t consent then how do you get the order instructions? Does someone from DD call you to place an order or something?
2
u/Chiccenstripz 18d ago
Yes, if you don’t receive a tablet from them they call you to place the order. They also call you if you don’t confirm the order on the tablets.
2
u/_DirtyYoungMan_ 18d ago
The delivery driver has the order on their phone. They literally handed it to us and we would have to manually enter it into the POS as if it were a regular customer sitting in the restaurant.
0
u/RocketScient1st 17d ago
Well that doesn’t seem that bad. It’s as if they are the customer, they are buying from you and just reselling to the end consumer. Really doesn’t seem like any loss to the business in this case. It’s not like you’re giving them a discount because they’re DD.
1
u/_DirtyYoungMan_ 17d ago
It's that bad. Not only do they charge exorbitant delivery fees to customers they also charge restaurants fees for being part of their "service". This on to of the fact that most of the restaurants on any of these platforms never consented to being on there. As in, they were not contacted or asked for permission, the platform simply parsed their website for the menu and auto-created a page for it. Many times the menu isn't even up to date so you have orders being brought in for items that aren't even available. Couple that with the fact that most of the delivery drivers have multiple stops and most food needs to be eaten fresh for it to be good and you've got tons of complaints rolling in to the innocent restaurant trying to do their best. It's a trash business model that only succeeded because of wanton tech investment and taking advantage of struggling restaurants during the pandemic.
1
u/RocketScient1st 17d ago
Well don’t pay the restaurant fee. They can’t force you to agree to fees you never agreed to in the first place. The only markups are those paid by the end customer not you the restaurant. And if you really don’t like DD just refuse their order when the DD person calls to place the order
1
u/_DirtyYoungMan_ 17d ago
That’s what happened. So in order to make up for it they marked up the item prices versus the actual restaurant menu price.
1
u/RocketScient1st 17d ago
But that doesn’t impact you right? It’s just the end customer who pays. If they don’t want to order directly from you then they’ll pay more. Seems like a no brainer from customers to order directly, but for those who want cold food at a higher price they can order from DD. Shouldn’t bother you.
1
u/_DirtyYoungMan_ 17d ago
Logistically it's a nightmare when you factor in our in-house customers. During a dinner rush when the kitchen is swamped we can shut-down our to-go ordering so they don't get overwhelmed. Not to mention the rudeness of a lot of the drivers when told they would have to come back 20-40 minutes later when the food was ready. Also, the inaccurate menus they listed as well as the food being cold when it arrived led to far too many complaints that in the long run was ruining our reputation. There were no positives to working with any of the delivery apps, if there were we would still be working with them.
6
u/WayneKrane 18d ago
A local mexican restaurant started doing this and ordering directly from them is a breeze now. The food comes fast, fresh and there is no fee.
3
0
u/theanonmouse-1776 18d ago
Finally, it says they both hide the fact many restaurants charge less for the items on their menu when you order directly from them.
That was probably the case when the lawsuit was filed years ago. Now they have small print saying that the prices on the menu are different from in store pricing. Also, they have always maintained that it is the restaurants who set the pricing. (this is technically true, but the reason why the restaurants have to jack up the pricing is because the apps are stealing 30% for no reason whatsoever)
The lawsuit will fail. They are playing catchup and are miles behind the grifting these companies are doing.
14
u/stardorsdash 18d ago
Recently I tried to order a sandwich from Postmates. The cost of the sandwich was $12. The cost of the delivery was $22. This is not including a tip. From what I can tell the delivery driver would’ve gotten six dollars for the delivery.
I decided not to get a sandwich.
5
u/theanonmouse-1776 18d ago
I don't know how you can tell. The average that postmates pays delivery drivers is between $1.50-$2.50 per delivery. The delivery companies keep easily 90% of the fees you pay, sometimes more. Also that sandwich probably really costs $9, but since postmates is taking $3 and only giving $6 to the restaurant, the restaurant has to charge $12 to still get their
$9$8 (they are still taking a hit).
14
u/Potatobat1967 18d ago
I stopped using DoorDash.The fees were getting outrageous.By the time you add in delivery fee,service fee,tax and tip snd the over priced food it just wasn’t worth it anymore.Not to mention half the time I had to babysit the driver just to get them to make it to my building in time for my food to be cold.I complained and they gave me credit that was basically worthless because the food is overpriced and always arrived cold.Great,Here’s five bucks so you can get more cold food.
10
u/LincHayes 18d ago
So related, I've noticed that the restaurants in my area have as much as DOUBLED their prices when ordering through Grubhub. I'm wondering if they're fighting back by making it more attractive to people to just order direct.
Anyone else notice this?
14
u/das_war_ein_Befehl 18d ago
It’s an obvious play. Restaurant margins are slim, so giving margin to an app is a long-term losing play
1
u/kickedofflotsofsubs 18d ago
Yeah I ordered from Dominos directly and got more pizza than through the app. It’s an absolute rip off. I couldn’t believe how small my pizza was for the same price.
45
u/ryderd93 18d ago
i signed up for grubhub+ because i use it a lot, and saving on delivery fees is pretty significant. $10 a month to save ~$3 a day is a solid deal for me.
then a few weeks ago i was ordering, and there was a $2.50 “service fee”?! wtf am i paying for then?!
20
u/[deleted] 18d ago edited 6d ago
[deleted]
8
u/theanonmouse-1776 18d ago
BuT dOn'T yOu KnOw ThAt UbEr Is LoSiNg MoNeY? tHeY cAn'T aFfOrD tO pAy FaIrLy BeCaUsE pRiCeS wOuLd Go Up!
People are so stupid...
6
u/starwarsfan456123789 18d ago
Prices already went up and it’s not viable anymore in most situations
-3
1
u/PennJerseyDevil 18d ago
Your paying for someone to not work…
3
u/ooowren 18d ago
Are you suggesting that drivers don’t work? Have you ever dashed before?
0
u/PennJerseyDevil 18d ago
Not dashed… a few others. And no… the driver doesn’t get that money silly.
Your paying for someone to “work” from home who is really just playing games on a phone while installing some software to make it look like they are actively clicking. Your also paying their supervisor, whom with no one is the office is just a paid paper weight.
The drivers absolutely work, and should get 95% of anything not charged by the restaurant… I mean even if DoorDash took $1 from the order they are set… they take very little risk and have nothing special.
10
u/zgf2022 18d ago
I've used Uber eats like twice and it was a joke both times
$30 for some taco bell that the first driver bailed on so it was cold by the time it got there and missing several things.
But I got a coupon to order more from the same place for my trouble
5
u/WayneKrane 18d ago
I only order delivery when there is a sale. I recently got 50% off which made the cost only $25 for a $50 meal. It’s not worth it otherwise.
26
u/CasualEcon 18d ago
These services hurt restaurants. They markup the menu to the customer, demand a discount from the restaurant, and over book the kitchen during peak hours. Please do not use them.
0
u/jeerabiscuit 18d ago
Computers gone rogue. Or rather their drivers.
7
5
u/RocketScient1st 18d ago
At work I order food from one of these places. I order for a large team and usually 1/3rd of the total cost goes towards delivery fee, tip (which is usually on the lower end), taxes, and the service fee.
I ordered dinner from one of these places a week ago and they cancelled my order because their driver got into a car accident. I used their “express reorder” system, and the total was $2 more expensive the second time. I contacted their customer service as to why their service charge was $2 more for the same exact order and the customer service rep tried to claim that taxes had went up, clearly not true, taxes don’t go up after 8pm. The prices that I’m charged also differ than for my spouse; prices are much higher for me probably because they know I spend a lot more since I use it for work all of the time.
21
u/[deleted] 18d ago
[deleted]
4
u/stardorsdash 18d ago
I did order directly from the restaurant. They still used door dash to deliver my order. I actively boycott door dash due to an experience a few months ago and was very upset to find out that now door dash was getting money from me again. The restaurant did not disclose they were using a third-party vendor for their delivery.
8
u/fezziks_human 18d ago
I'll call and order directly from restaurants that have their own delivery, but many in my area don't, so Doordash enables my family to order from a much broader pool of options without having to go pick up (which can be challenging in our circumstances). Plus being able to track the order and delivery guy is helpful to wrangle kids to the table at the right time.
Still don't like the way they hide their costs, though.
3
u/jeerabiscuit 18d ago
I used to be a lazy selfish phone tapping prick before the pandemic. After it ends I am going back to ordering from flyers.
2
2
0
9
u/curryjunky 18d ago
UberEats is also shady AF
10
u/John271095 18d ago edited 18d ago
They’re much worse than Grubhub with their bs fees. Sometimes your fees become more than your order total. Your total can be like 20 bucks, but Uber eats likes to add service fees, delivery fees, taxes, and you also have to tip. By the time at end of the transaction, your total becomes 50 bucks.
2
u/Rabbidlobo 18d ago
Don’t use them. Just call the restaurant directly
2
u/Nid-Vits 18d ago
They are parasites that get in between the client and their customer. Many restaurant owners that I know call them the food mafia.
3
u/Vast_Cricket 18d ago
I will not be surprised to see more cities follow Chgo 's footsteps. I have a website every restaurant you can order the food I will deliver it for a markup.
8
u/Meistermalkav 18d ago
Nothing of value was lost.
imagine being a small rtestaurant, that employs one person in the kitchen.
Imagine priding yourself on the entire family helping.
The delivery driver is not some faceless minimum wage hire, it is frankie, the son.
Imagine allways getting the 5 stars, and being no small ammount of proud of that, because it is not easy.
Suddenly, the first one star review. And the second.
And you ask, with tears in your eyes, your friendly neighborhood german for help. becausde there were some weird comments, and you know for a fact, franbkie did not make any deliveries that day.
And you discover, that there exists a small website for the restaurant, run by door dash, that runs on a menu from 2 years ago, that offers the same items as your joint. and then just puipes the orders through.
And suddenly, it was clear where that damage to the reputation score came from.
A few calls to local representatives were successless, and they were all, "what are you gonna do about it?"
suddenly, the weirdest things started happening. Customers were informed that any and all orders over doordash would cost 50 % more "asshole tax".
Again and again, people asked nicely, remiove the websiote you created for our restaurant, so.... suddenlty, there must have been a special, because the shop ran 10 % off your order if you leave an 1 star review and a creatively written story about what the driver did to you in the appstore. OOH, you would not believe who left one star reviews.
but the crowning exploit was that those doordash drivers all paid with a credit card.... so, one day, I started a try, and ordered an older menu item, a pizza with sardines, but I told the shop, when that order comes in, you need to do nothing to it, just put a blank disc of dough in, and lets see if it ships.
Suddenly, the blank disc of douygh arrives. Anywone working a restaurant giv knows the pizza does not cost you a lotn to make, lets say 5 bucks, and a flat dough alone is even less. .... so pure profit.
YOu better believe that the store dog ate baked dough till be puked.
All in all, a fitting punishment would be to take the copyright away from doordash, or their app / twitter controll, for a period of time they ran those websites, and let the affected restaurants decide what is business practice now.
If it was just "we have a website that is clearly marked as doordash, you can order the items through us, ect" not a single problem with it. This is how it is supposed to run. A plus for any servcice who runs it like that.
IF they refuse to take those brand infringing websites off the net... Lets just say it is very easy to find a chinese or russian manifacturer of those jackets, and hand them to the local gangs / motorcycle gangs, along with perhaps a few sixpacks to "create some outrage" like beat the shit out of a few millenials, or take shits in public places, or vomit all over someones cabrio. allways with the back idea, if they don't like the investigation or the negative publicity, they just have to take the website down, and those incidents stop.
Oh, and if your buysiness modell relies on making shitty websites, driving down the profit of the small businesses, and then going "We could not help to notice youy are not doing so well, how about you pay us 10 % of the profit of the entire busioness, and the troubles stop"?
That is nothing more then a simple "Nice business you got there, shame iof something happened to it. " Those people deserve a bankrupcy, and at least several hacks of their customer database.
8
u/curryjunky 18d ago
I’m not sure what I read here but I still love it.
1
u/jeerabiscuit 18d ago
Tldr these apps are playing dirty politics after inserting themselves in between so they need a good collar shaking by the mob!
5
0
0
u/eyoung1122 18d ago
While I always prefer to order directly from the restaurant for numerous reasons, there is at least one very valuable benefit for the time being: having someone there to work delivery.
Restaurants and others are still struggling to hire people to staff dining room, counters, cooks, etc etc. It surely affects delivery drivers too.
Until workforce participation picks up, having a service like GH, UE, etc does provide restaurants some benefit.
Now, I’d love to see restaurants hire their own and be able to fully function again so we can easily choose not to support these apps who pillage everyone from the drivers to the restaurants to the consumer. They suck.
1
u/Nid-Vits 18d ago
Not when you look at what they take right off the top. To me they are a parasite.
0
u/MizchiefKilz 18d ago
Maybe Chicago should work on that murder rate instead of trying to scam money out of popular and successful companies.
3
1
1
u/madmatthammer 18d ago
Grubhub adds 4.00 to every sushi roll on their shady ass menu. 4.00!!!!! Then delivery fee, tax, tip etc. I'd rather eat homeless toenails than contribute to their shady business plan..
1
1
u/azzy989 18d ago
The whole delivery model is fucked up. I feel bad every time I order through these apps, as I don’t tip too high, which makes me feel guilty that I didn’t compensate the delivery guy. If I tip well, then the whole purpose of spending with a certain budget is gone out of the window. So unless it’s a huge order and I tip well, I just don’t order through these apps. I am not sure if all these app companies including Uber eats will ultimately be shut down. The same goes for driver apps, but hen there is no middlemen, except the app. The business model is not sustainable, especially when the margins are razor thin.
1
u/soharda_1 17d ago
SEO backlinks a high-quality white hat and ensure link building campaign. that helps increase traffic increase website google ranking, All websites are displayed in the charging engine on Google / Yahoo / Bing, etc.
On the off chance that the Backlinks are High Position, TF, DF remember (Google Loves Them)
Key features of my service
Unlimited URL & Keyword accepting
100% Satisfaction Guaranteed and google ranking
100% Penguin and Panda safe
White Hat SEO service
Quick indexing for google ranking
Niche relevant, scraped and spun Content
Delivery Always On Time. Plus 24/7 Support.
Detailed Excel Report.
-1
u/2penises_in_a_pod 18d ago
The things pointed out about Grubhub are certainly annoyances, but I’m not sure if they reach into any criminal territory.
We have a market to deal with these kind of bad business tactics. Just order from the restaurant or use another service… flushing taxpayer money away on legal expenses is not the way.
1
u/Lumpy-Dingo-947 18d ago
If they mark up the price shouldn’t they pay sales tax on the original cost just like someone selling secondhand materials are required to?
1
u/2penises_in_a_pod 17d ago
They didn’t mention that in the article. If they were breaking tax law they wouldn’t have to be sued it would be addressed in criminal court.
1
u/Lumpy-Dingo-947 17d ago
I’m sorry I didn’t intend to suggest that was in the article. They’re being investigated because the bad business practices might violate some law or licensing ordinance, but I was thinking of the consequences of the various was to claim it was legitimate.
113
u/Able_Education 18d ago
I order directly from the restaurant, usually there is an established delivery service where I order, tried both services and they do over charge for everything on the menus and at the stores. Then the delivery fee is astronomical plus tip, no thanks. I’d rather tip the kid who was hired by the restaurant as the delivery driver. Let’s stick to the basics.