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DoorDash will pay $18 million to resolve Chicago’s federal lawsuit accusing the food-delivery giant of duping diners with buried fees, inflated prices and deceptive practices that ballooned as COVID-19 lockdowns drove the company’s explosive rise, city officials announced Friday.

Chicago Mayor Brandon Johnson unveiled the doordash $18m settlement, which ends a four-year battle over allegations that DoorDash expanded its footprint by misleading consumers, undercutting restaurants and using tips to prop up its own labor costs during the public health emergency.

City: DoorDash Masked Fees, Manipulated Prices, Exploited Pandemic Chaos

According to the city, DoorDash misled customers between 2014 and 2021 by piling on “service fees,” “small order fees,” and a $1.50 “Chicago” fee — all tucked into tax groupings that implied they were government-mandated charges.

The city said DoorDash also obscured the fact that menu prices on its app could exceed those offered directly by restaurants, and dangled discounts that only applied if customers hit certain spending thresholds.

Restaurants Dragged In Without Consent

Investigators also accused DoorDash of boosting its offerings by listing restaurants that had no relationship with the company, advertising them as if they were partners. Meanwhile, customer tips allegedly subsidized DoorDash’s own payments to drivers — a practice the city said gave the company an unfair cost advantage.

The settlement divides the $18 million into several pools:

• $3.25 million for restaurants that were listed without consent and remain unaffiliated.

• $5.8 million in commission and marketing credits for restaurants currently on the platform.

• Additional credits for eateries first listed without consent but later onboarded.

• $4 million in DoorDash credits automatically applied to eligible Chicago customers starting Jan. 28.

• $4.5 million reimbursing the city for legal fees.

• $500,000 for Chicago-area drivers active as of September 2019, when DoorDash’s tip-offsetting practice was last used.

Settlement Closes Four-Year Saga Targeting DoorDash and Grubhub

The agreement closes a case launched against both DoorDash and Grubhub, accusing the companies of violating Chicago’s municipal code by advertising delivery services for restaurants without consent, escalating prices at checkout and including inflated menu pricing.

Central to the city’s claims was DoorDash’s misleading $1.50 “Chicago” fee — a charge that looked like a local tax but instead flowed entirely into DoorDash’s pockets.

Both DoorDash and Grubhub insisted they had been transparent about their terms and instead served as lifelines to restaurants and customers during the pandemic’s darkest months.

Court Narrowed the Case, Pushed Parties Toward Resolution

In September 2024, U.S. District Judge Jeremy Daniel trimmed the case, ruling that alleged municipal-code violations older than two years were time-barred. He then paused proceedings to give the parties time to negotiate. By Sept. 17, both sides told the court they had reached an agreement in principle.

DoorDash, Grubhub and Uber Eats have faced similar legal actions around the country. Chicago previously settled with Uber Eats and Postmates for $10 million in December 2022 over related emergency fee-cap violations and advertising issues.

City Hails Victory; DoorDash Says Allegations Are Outdated

Mayor Johnson called the settlement a win for restaurants, workers and consumers.

“This settlement shows Chicago’s commitment to a fair marketplace,” Johnson said. “Our hospitality industry thrives only when workers are respected, companies follow the rules, and consumers get honest pricing.”

DoorDash, in a statement, said the agreement reflects a desire to move forward, not wrongdoing.

“We’re pleased to have settled a years-old lawsuit with the city of Chicago,” a spokesperson said. “This is not an admission of wrongdoing, and the practices examined in the lawsuit no longer exist. We’re ready to move on and stay focused on improving the experience for merchants, customers and Dashers.”

Lawyers Behind the Deal

Chicago is represented by attorneys from the city’s Affirmative Litigation Division and Cohen Milstein Sellers & Toll PLLC.

DoorDash and its subsidiary Caviar are represented by Gibson Dunn & Crutcher LLP, Forde & O’Meara LLP, and Riley Safer Holmes & Cancila LLP.