8 ms·

Chicago sues Grubhub and DoorDash for allegedly deceptive practices

104 points by Larrikin 5y ago

birksherty 5y ago
Over the years it's clear that tech companies are basically frauds and manipulative cheats just like others. They will do anything for profit.
gillytech 5y ago
> At one point, DoorDash was using tips to subsidized [sic] wages for drivers, meaning employees wouldn’t earn more than their locked-in wages. This is unbelievably dishonest.
- zucker42 5y ago
  Isn't it also illegal?
  - dboreham 5y ago
    Disruptive.
    - kyleee 5y ago
      One woman's "disruptive" is another woman's "illegal"
- jazzyjackson 5y ago
  It's dishonest but it's also basically industry standard for food service, you only make tips above your wage after you subsidize your own wage, for example in my state NC: "In North Carolina, an employer MUST pay at least $2.13 an hour to tipped employees as long as each employee receives enough in tips to make up the difference between the wages paid and the minimum wage ($7.25)." https://www.labor.nc.gov/workplace-rights/employee-rights-regarding-time-worked-and-wages-earned/minimum-wage-nc https://www.labor.nc.gov/workplace-rights/employee-rights-re... Tipped Wage is a thing in 43 states: https://en.m.wikipedia.org/wiki/Tipped_wage#State_law https://en.m.wikipedia.org/wiki/Tipped_wage#State_law
  - gillytech 5y ago
    You know I always knew that a tipped job always had a base pay that was much lower than minimum wage. However I didn't know that the portion payed by the employer was subsidized by tips! This is making me reflect on my own tipping tendencies...
    - Dylan16807 5y ago
      > However I didn't know that the portion payed by the employer was subsidized by tips! It's not, at least not legally. What DoorDash did was basically the same as having a tipped minimum, on a per-delivery basis. Basically, they promised a certain amount of money for each delivery, along with a minimum payment of $1. So if $1+tip was smaller than the promise, DoorDash made up the difference. If the tip was really big, then the driver would get exactly $1+tip.
      - Jasper_ 5y ago
        The DoorDash UI prevented you from giving a "really big" tip. It topped off right at the point that drivers would actually start getting tipped in your math.
wirthjason 5y ago
I get that Grubhub, DoorDash, and other industry players have created value but the I wish there was a white-label software stack that is easily administered by less technical people so the restaurants can take control back. I’m thinking something akin to a Wordpress 1-click install. Apps like grub hub are very slick but the other end of the spectrum are terrible HTML pages that look like they were designed 20 years ago. There’s a wide gap and a lot if opportunity for something in the middle. I don’t mind calling a restaurant direct. I would be happy with a simple menu and an easy to find phone number. I’m often weary of dark practices where GrubHub lists their own number, not the restaurants real number, and charges a commission or “finders fee.”
- melomal 5y ago
  The trouble is not with the ease of development but the centralization and ease of finding the restaurant. Marketplaces provide a one-stop location for customers, instead of searching Google then scrolling and clicking through each site to then get a 404 or poor website. If you created a simple website it would need a whole bunch of work to get it to rank, get it added to Maps, Yelp etc. A well known marketplace/s provides everything for a very low cost in the long run.
  - Larrikin 5y ago
    This is not true and the opposite is actually true when it comes to ease of listing. There are many restaurants listed on Yelp and maps that are unclaimed. They are both incentived to get as many businesses on as possible. As soon as the owner cares a little bit there is a straight forward method for claiming the listing and then the owner can set their hours and own website. I personally don't waste my time helping massive companies for free by adding the listings but many people still do. I also don't put any worth into Yelp or Google reviews and hate generalized way menus are displayed and find the "poor" websites do a far better job at highlighting the restaurants offering. I always immediately click the website link on either to actually determine if I want to go. Maps and Yelp only are useful for a localized search of places directly around me.
- wyattpeak 5y ago
oceanghost 5y ago
So I know this is not directly related to this lawsuit-- but, can someone with knowledge of the industry explain this to me? I placed and order for pickup from "Custy's pizza" in Norco CA-- which if I understand correctly has been in business for at least 30 years. I had ordered from GrubHub from there without incident several times before. I place my order and it proceeds through the normal order progression. It just happens to be an early evening where it is pouring rain-- very rare in my region of California. When I arrive at the pizza shop-- the lights are off inside, and the door is chained. After a few hours, GrubHub confirms I've picked up my pizza (I hadn't), and the transaction was complete. I tried to dispute the transaction, but GrubHub kept closing the chat and then giving a cheery message about how I'd closed the support chat (I hadn't). I have maybe used GrubHub once since. Ironically, that experience forced me to discover a pizza shop that was closer to my place that had much higher quality food and much better service (mostly staffed by locals). What the heck happened here? How does an order process proceed through a restaurant that is closed and unmanned? I have to assume some sort of malfeasance.
- hn_go_brrrrr 5y ago
  Grubhub agents always do that to me too. It's absolutely infuriating.
  - oceanghost 5y ago
    Can you explain what a "Grubhub agent" is for reference?
    - miked85 5y ago
      A customer service agent who works for Grubhub.
  - op00to 5y ago
    I have literally never had a problem with grubhub support. Any time there is a problem, they are quick to throw vouchers at me which is fine.
google234123 5y ago
Imagine if the city spent this energy on reducing the murder rate below 100 per month instead of suing companies for ideological reasons.
- dannyr 5y ago
  Believe it or not, governments or any organization or individual for that matter, can be pursuing more than one thing at a time. And how is suing companies for fraud an ideological thing? And which ideology is that?
- anaganisk 5y ago
  You do realise that the city would be having like multiple things tackling multiple issue right? Or do you think its just once person running here and there fixing issues?
shadilay 5y ago
If Grubhub/Doordash are misrepresenting themselves as having an affiliation with the restaurants that they do not then it is fraud and the restaurants are owed compensation.
- PostThisTooFast 5y ago
  They do it all the time.
xnx 5y ago
I'd love to have a Door dash / Uber eats / GrubHub price comparison tool. This would probably do more than anything to drive process down.
makecheck 5y ago
I know of at least one clearly-garbage behavior, which is the “Taxes & Fees” category (initially hidden). Basically instead of saying something like “$7 DoorDash fee” they say “$5 DoorDash fee” and tucked under “Taxes & Fees” is another $2. This kind of crap is why companies just aren’t trustworthy without reasonable regulation. They default to “trick the customer” every chance they get.
- erhk 5y ago
  Google artificially inflates the prices when it proxies for postmates so ive taken to phoning the business directly and tipping employees directly rather than let thiry party skimmers abuse my community
- Salgat 5y ago
  I don't understand how people can tolerate a 50% markup to save 15-25 minutes of driving. Not only is the food marked up higher, but then they add the fees, the tips, etc. I'd rather just use that money saved to buy even more takeout later or at least make my order larger for leftovers.
  - makecheck 5y ago
    My way around fees is to greatly increase what I order to dilute the fee, e.g. I might order 3-4 days of stuff. Even before apps, e.g. back in the day when ATM fees kept increasing, I kept doubling the amount of cash I took out so that the fee change didn’t matter. In general I think businesses count on most people not noticing or finding it too inconvenient to change behavior. Probably the same principle behind forcing people to spend hours on hold to make companies do things they don’t like, such as cancelling things.
  - ncallaway 5y ago
    > I don't understand how people can tolerate a 50% markup to save 15-25 minutes of driving They probably don't. They probably don't realize that the food is marked up in addition to the fees. I would imagine, most users look at the $5 fee, decide that's worth delivery, and assume the prices of the food are the same they'd be paying to the restaurant itself.

104 points by Larrikin 5y ago

Over the years it's clear that tech companies are basically frauds and manipulative cheats just like others. They will do anything for profit.

gillytech 5y ago

> At one point, DoorDash was using tips to subsidized [sic] wages for drivers, meaning employees wouldn’t earn more than their locked-in wages. This is unbelievably dishonest.

zucker42 5y ago
Isn't it also illegal?
- dboreham 5y ago
  Disruptive.
  - kyleee 5y ago
    One woman's "disruptive" is another woman's "illegal"
jazzyjackson 5y ago
It's dishonest but it's also basically industry standard for food service, you only make tips above your wage after you subsidize your own wage, for example in my state NC: "In North Carolina, an employer MUST pay at least $2.13 an hour to tipped employees as long as each employee receives enough in tips to make up the difference between the wages paid and the minimum wage ($7.25)." https://www.labor.nc.gov/workplace-rights/employee-rights-regarding-time-worked-and-wages-earned/minimum-wage-nc https://www.labor.nc.gov/workplace-rights/employee-rights-re... Tipped Wage is a thing in 43 states: https://en.m.wikipedia.org/wiki/Tipped_wage#State_law https://en.m.wikipedia.org/wiki/Tipped_wage#State_law
- gillytech 5y ago
  You know I always knew that a tipped job always had a base pay that was much lower than minimum wage. However I didn't know that the portion payed by the employer was subsidized by tips! This is making me reflect on my own tipping tendencies...
  - Dylan16807 5y ago
    > However I didn't know that the portion payed by the employer was subsidized by tips! It's not, at least not legally. What DoorDash did was basically the same as having a tipped minimum, on a per-delivery basis. Basically, they promised a certain amount of money for each delivery, along with a minimum payment of $1. So if $1+tip was smaller than the promise, DoorDash made up the difference. If the tip was really big, then the driver would get exactly $1+tip.
    - Jasper_ 5y ago
      The DoorDash UI prevented you from giving a "really big" tip. It topped off right at the point that drivers would actually start getting tipped in your math.

wirthjason 5y ago

I get that Grubhub, DoorDash, and other industry players have created value but the I wish there was a white-label software stack that is easily administered by less technical people so the restaurants can take control back. I’m thinking something akin to a Wordpress 1-click install. Apps like grub hub are very slick but the other end of the spectrum are terrible HTML pages that look like they were designed 20 years ago. There’s a wide gap and a lot if opportunity for something in the middle. I don’t mind calling a restaurant direct. I would be happy with a simple menu and an easy to find phone number. I’m often weary of dark practices where GrubHub lists their own number, not the restaurants real number, and charges a commission or “finders fee.”

melomal 5y ago
The trouble is not with the ease of development but the centralization and ease of finding the restaurant. Marketplaces provide a one-stop location for customers, instead of searching Google then scrolling and clicking through each site to then get a 404 or poor website. If you created a simple website it would need a whole bunch of work to get it to rank, get it added to Maps, Yelp etc. A well known marketplace/s provides everything for a very low cost in the long run.
- Larrikin 5y ago
  This is not true and the opposite is actually true when it comes to ease of listing. There are many restaurants listed on Yelp and maps that are unclaimed. They are both incentived to get as many businesses on as possible. As soon as the owner cares a little bit there is a straight forward method for claiming the listing and then the owner can set their hours and own website. I personally don't waste my time helping massive companies for free by adding the listings but many people still do. I also don't put any worth into Yelp or Google reviews and hate generalized way menus are displayed and find the "poor" websites do a far better job at highlighting the restaurants offering. I always immediately click the website link on either to actually determine if I want to go. Maps and Yelp only are useful for a localized search of places directly around me.
wyattpeak 5y ago

oceanghost 5y ago

So I know this is not directly related to this lawsuit-- but, can someone with knowledge of the industry explain this to me? I placed and order for pickup from "Custy's pizza" in Norco CA-- which if I understand correctly has been in business for at least 30 years. I had ordered from GrubHub from there without incident several times before. I place my order and it proceeds through the normal order progression. It just happens to be an early evening where it is pouring rain-- very rare in my region of California. When I arrive at the pizza shop-- the lights are off inside, and the door is chained. After a few hours, GrubHub confirms I've picked up my pizza (I hadn't), and the transaction was complete. I tried to dispute the transaction, but GrubHub kept closing the chat and then giving a cheery message about how I'd closed the support chat (I hadn't). I have maybe used GrubHub once since. Ironically, that experience forced me to discover a pizza shop that was closer to my place that had much higher quality food and much better service (mostly staffed by locals). What the heck happened here? How does an order process proceed through a restaurant that is closed and unmanned? I have to assume some sort of malfeasance.

hn_go_brrrrr 5y ago
Grubhub agents always do that to me too. It's absolutely infuriating.
- oceanghost 5y ago
  Can you explain what a "Grubhub agent" is for reference?
  - miked85 5y ago
    A customer service agent who works for Grubhub.
- op00to 5y ago
  I have literally never had a problem with grubhub support. Any time there is a problem, they are quick to throw vouchers at me which is fine.

google234123 5y ago

Imagine if the city spent this energy on reducing the murder rate below 100 per month instead of suing companies for ideological reasons.

dannyr 5y ago
Believe it or not, governments or any organization or individual for that matter, can be pursuing more than one thing at a time. And how is suing companies for fraud an ideological thing? And which ideology is that?
anaganisk 5y ago
You do realise that the city would be having like multiple things tackling multiple issue right? Or do you think its just once person running here and there fixing issues?

shadilay 5y ago

If Grubhub/Doordash are misrepresenting themselves as having an affiliation with the restaurants that they do not then it is fraud and the restaurants are owed compensation.

PostThisTooFast 5y ago
They do it all the time.

xnx 5y ago

I'd love to have a Door dash / Uber eats / GrubHub price comparison tool. This would probably do more than anything to drive process down.

makecheck 5y ago

I know of at least one clearly-garbage behavior, which is the “Taxes & Fees” category (initially hidden). Basically instead of saying something like “$7 DoorDash fee” they say “$5 DoorDash fee” and tucked under “Taxes & Fees” is another $2. This kind of crap is why companies just aren’t trustworthy without reasonable regulation. They default to “trick the customer” every chance they get.

erhk 5y ago
Google artificially inflates the prices when it proxies for postmates so ive taken to phoning the business directly and tipping employees directly rather than let thiry party skimmers abuse my community
Salgat 5y ago
I don't understand how people can tolerate a 50% markup to save 15-25 minutes of driving. Not only is the food marked up higher, but then they add the fees, the tips, etc. I'd rather just use that money saved to buy even more takeout later or at least make my order larger for leftovers.
- makecheck 5y ago
  My way around fees is to greatly increase what I order to dilute the fee, e.g. I might order 3-4 days of stuff. Even before apps, e.g. back in the day when ATM fees kept increasing, I kept doubling the amount of cash I took out so that the fee change didn’t matter. In general I think businesses count on most people not noticing or finding it too inconvenient to change behavior. Probably the same principle behind forcing people to spend hours on hold to make companies do things they don’t like, such as cancelling things.
- ncallaway 5y ago
  > I don't understand how people can tolerate a 50% markup to save 15-25 minutes of driving They probably don't. They probably don't realize that the food is marked up in addition to the fees. I would imagine, most users look at the $5 fee, decide that's worth delivery, and assume the prices of the food are the same they'd be paying to the restaurant itself.