• In 2021 it was discovered that Uber was listing Chicago restaurants on its app that hadn’t elected to join.
• The firm also charged excessive commission fees and must now pay $10 million as part of a settlement with the City of Chicago.
• Uber denies any wrongdoing in this matter.

Adding food delivery apps into a restaurant’s work flow isn’t especially difficult but it’s something owners and staff need to want to do.

In fact, one can’t just simply appear on the Uber Eats app without going through a process, that is, unless you were in Chicago in 2021.

According to the City of Chicago, it discovered unlawful activity from Uber and Postmates (an Uber company) last year. The mobility firm had reportedly listed restaurants in Chicago on its app without said restaurants having any knowledge of this. Worse still, Uber was also accused of charging excessive commission fees.

As reported by TechCrunch, several food delivery apps including Postmates, Seamless, GrubHub and Doordash have done this before. The publication reports that these apps would pull restaurant menus from the web and when orders came in, couriers would place the order at the restaurant. This caused problems as pricing online and in-store would not line up or items were no longer available.

This is of no consequence to the app but for restaurants trying to recover from a pandemic, it could be a death knell.

As result of its trespasses, Uber will now pay a settlement totalling $10 million to the City of Chicago and local restaurants.

However, restaurants won’t be getting hard cash in most instances.

Of the $10 million settlement, $2.5 million will go to a Commission Credit Fund. This fund will be used to pay for Uber services for restaurants that want to join the app and were previously not on it or were listed improperly. This fund will cover all marketing fees and commissions Uber would usually collect from the restaurant. Importantly, once these funds are used up, merchants have no obligation to stay with Uber.

One instance where restaurants will get money is if they were improperly listed on the app and submit a short attestation to the city. Here restaurant owners will split a $500 000 sum with each owner receiving a maximum of $1 000. Any money left over will go into the Commission Credit Fund.

A further $2.25 million will be split among merchants who were charged commissions in excess of 15 percent. While $1.5 million of that settlement will go to paying the City of Chicago’s costs accrued over the two year investigation.

“Today’s settlement reflects the City’s commitment to creating a fair and honest marketplace that protects both consumers and businesses from unlawful conduct,” said City of Chicago Mayor, Lori Lightfoot, in a statement.

“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. There is no room for deceptive and unfair practices,” the mayor added.

While Uber admits to no wrongdoing in this matter, this settlement is sure to hurt its operations in Chicago for the foreseeable future. And while $10 million isn’t a lot in the greater scheme of Uber’s multi-billion dollar business, reputation is everything in this industry and this matter won’t help it.