Technology

Chicago sues DoorDash, Grubhub for allegedly deceiving customers

Published

4 years ago

August 27, 2021

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In this article

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A bike messenger carries a DoorDash bag during a delivery in New York, Wednesday, Dec. 9, 2020.

Michael Nagle | Bloomberg | Getty Images

The City of Chicago filed two sweeping lawsuits against DoorDash and Grubhub for allegedly deceiving customers and using unfair business practices.

The suits echo longstanding claims from restaurant owners that the platforms advertise delivery services for their businesses without their consent and conceal lower prices that restaurants offer directly to customers outside of the platforms.

The city also claims both platforms use a “bait-and-switch” method to attract customers with low delivery fees, only to charge additional ones when they are about to place their order.

In separate statements, both DoorDash and Grubhub called the lawsuits “baseless.”

A DoorDash spokesperson said the company “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.”

In November, DoorDash stopped adding new restaurants that it doesn’t have agreements with to its app. It also said it will remove restaurants that don’t want to be listed within 48 hours of being notified.

Grubhub similarly says it removes listing for non-partner restaurants when asked. It said only a small percentage of such businesses have requested removal. The company said its contracts require restaurants to offer customers at least as favorable prices on its platform as available elsewhere, contrary to the city’s assertion that it conceals lower prices off the platform.

“Every single allegation is categorically wrong and we will aggressively defend our business practices,” a Grubhub spokesperson said in a statement. “We look forward to responding in court and are confident we will prevail.”

The city is seeking to end the alleged misconduct by mandating more transparency, civil penalties and restitution for consumers and restaurants hurt by the alleged practices.

The suits include additional claims specific to each company.

The city alleged that Grubhub deceptively shared telephone numbers for customers to connect with restaurants, but would charge the restaurants a commission for calls placed through those numbers, even when they didn’t result in an order. The city also claimed Grubhub made “imposter websites” for restaurants to unexpectedly lure customers to its own platform.

Grubhub has maintained that its creation of sites for restaurants does not violate laws, though it has ended the practice. The company also changed its phone routing system on Aug. 23 so that calls from customers seeking answers from restaurants not about an existing order will be sent directly to those businesses at no cost.

The suit claims Grubhub’s marketing campaigns promoting local restaurants during the pandemic were deceptive, while it allegedly forced restaurants to extend their contracts and cover promotion costs. It also alleged Grubhub violated Chicago’s 15% emergency cap on commissions that delivery platforms could take from restaurants.

Grubhub denied violating Chicago’s emergency commission cap and denied that its pandemic campaign was deceptive. The company said more than $500,000 that it raised in the campaign went to Chicago restaurants.

The city claimed DoorDash misled customers about how their tips for drivers would be used. This issue has been the subject of a separate lawsuit from the attorney general of the District of Columbia. DoorDash has said it changed its tipping method prior to the D.C. attorney general’s suit. It reached a $2.5 million settlement with his office in November over those claims.

Chicago also alleged DoorDash misleadingly labeled a $1.50 fee placed on every order as a “Chicago Fee.” The city claimed this wrongly implied the fee was required by or paid to Chicago rather than DoorDash.

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WATCH: Delivery workers are risking their lives to bring people groceries during coronavirus — here’s what it’s like for them

Technology

Tesla short sellers have made $11.5 billion from this year’s selloff

Published

2 hours ago

April 22, 2025

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Tesla short sellers have made .5 billion from this year's selloff

It’s been a brutal year for Tesla shareholders so far, and a hugely profitable one for short sellers, who bet on a decline in the company’s stock price.

Tesla shorts have generated $11.5 billion in mark-to-market profits in 2025, according to data from S3 Partners. The data reflected Monday’s closing price of $227.50, at which point Tesla shares were down 44% for the year.

The stock rallied about 4% on Tuesday, along with gains in the broader market, heading into Tesla’s first-quarter earnings report after the close of trading. Tesla didn’t immediately respond to a request for comment.

The electric vehicle maker is expected to report a slight decline in year-over-year revenue weeks after announcing a 13% drop in vehicle deliveries for the quarter. With CEO Elon Musk playing a central role in President Donald Trump’s administration, responsible for dramatically cutting the size and capacity of the federal government, Tesla has faced widespread protests in the U.S. and Europe, where Musk has actively supported Germany’s far-right AfD party.

Tesla shares plummeted 36% in the first quarter, their worst performance for any period since 2022, and have continued to drop in April, largely on concerns that President Trump’s sweeping tariffs on top trade partners will increase the cost of parts and materials crucial for EV production, including manufacturing equipment, automotive glass, printed circuit boards and battery cells.

The company is also struggling to keep pace with lower-cost competitors in China, and is a laggard in the robotaxi market, which is currently dominated in the U.S. by Alphabet’s Waymo. Tesla has promised to launch its first driverless ride-hailing offering in Austin, Texas, in June.

Tesla has been the biggest stock decliner among tech megacaps this year, followed by Nvidia, which was down about 28% as of Monday’s close. The chipmaker has been the second-best profit generator for short sellers, generating returns of $9.4 billion, according to S3.

Nvidia is currently the most-shorted stock in terms of value, with $24.6 billion worth sold short, S3 said. Apple is second at $22.2 billion, and Tesla is third at $17.6 billion.

Musk has a long and antagonistic history with short sellers, who have made plenty of money at times during Tesla’s 15 years on the stock market, but have also been burned badly for extended stretches.

In 2020, Tesla publicly mocked short sellers, promoting red satin shorts for sale.

“Limited edition shorts now available at Tesla.com/shortshorts” Musk wrote in a social media post in July of that year, as the stock was in the midst of a steep rally.

Two years earlier, hedge fund manager David Einhorn of Greenlight Capital posted a tweet that he received the pairs of short shorts that Musk had promised him.

“I want to thank @elonmusk for the shorts. He is a man of his word!” Einhorn wrote. Einhorn had previously disclosed that his firm’s bet against Tesla “was our second biggest loser” in the most recent quarter.

In February 2022, after reports surfaced that the Department of Justice was investigating two investors who had shorted Tesla’s stock, Musk told CNBC that he was “greatly encouraged” by the action and said “hedge funds have used short selling and complex derivatives to take advantage of small investors.”

PlainSite founder Aaron Greenspan, a former Tesla short seller and outspoken critic of Musk, sued the Tesla CEO alleging he engaged in stock price manipulation for years through a variety of schemes.

The case was removed to federal court last year. In 2023, Musk’s social network X banned Greenspan and PlainSite, which publishes legal and other public and company records, from the platform.

— CNBC’s Tom Rotunno contributed to this report.

WATCH: Here’s what to watch for in Tesla’s earnings report

Technology

Instagram launches Edits app for video, rivaling TikTok

Published

3 hours ago

April 22, 2025

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Instagram Edits app.

Courtesy: Instagram

Instagram on Tuesday launched its standalone Edits video creation app that offers features similar to those already available from TikTok parent Bytedance.

The new app allows creators to organize project ideas, shoot and edit video, and access insights about content. Edits includes background replacement, automatic captioning and artificial intelligence tools that can turn images into video.

“There’s a lot going on in the world right now and no matter what happens, we think it’s our job to create the most compelling creative tools for those of you who make videos for not just Instagram but for platforms out there,” said Adam Mosseri, the head of Instagram, in a Reel posted in January announcing the app.

Edits appears to be Meta‘s answer to CapCut, TikTok’s sister app that is also owned by China-based parent company ByteDance, which allows users to create and edit video on their phone or computer.

Instagram Edits app.

Courtesy: Instagram

Tesla set to report first-quarter results after the bell

Published

4 hours ago

April 22, 2025

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Tesla set to report first-quarter results after the bell

Tesla CEO Elon Musk wears a ‘Trump Was Right About Everything!’ hat, as he, U.S. Trade Representative Jamieson Greer and Central Intelligence Agency Director John Ratcliffe attend a cabinet meeting at the White House, in Washington, D.C., U.S., March 24, 2025.

Carlos Barria | Reuters

Tesla is set to report first-quarter earnings on Tuesday after market close.

Here’s what Wall Street is expecting, based on a survey of analysts by LSEG:

Earnings per share: 39 cents
Revenue: $21.11 billion

Tesla is expected to report a slight revenue decline from $21.3 billion in the same quarter a year earlier. However, investors are going to be more focused on what the future holds after concerns about tariffs and CEO Elon Musk’s close ties to the White House pushed the stock price down 44% so far this year as of Monday’s close.

Earlier this month, Tesla reported a 13% decline in deliveries to 336,681. Tesla blamed the lower deliveries, in part, on the need to suspend production temporarily at its factories while it upgraded lines to start manufacturing a refreshed version of its popular Model Y electric SUVs.

Deliveries are the closest approximation of vehicle sales reported by Tesla but are not precisely defined in the company’s shareholder communications.

At an all-hands meeting with employees last month, Musk tried to reassure staffers that they were still in good hands, and to “hang onto your stock.” He pointed to the popularity of the Model Y, and Tesla’s potential in robotics, artificial intelligence and autonomous vehicle technology.

At the meeting, Musk also made light of the backlash against Tesla elicited by his work for President Donald Trump to reduce the size of the federal government, and his endorsements of Germany’s anti-immigrant AfD party, along with other political rhetoric and antics.

“If you read the news it feels like, you know, Armageddon,” Musk said on a livestream of the employees meeting. “It’s like, I can’t walk past the TV without seeing a Tesla on fire.” He followed up saying, “This is psycho, stop being psycho!”

That was before Trump’s announcement earlier this month of widespread tariffs, the one area where Musk has publicly broken with the Trump administration. On X, he called Peter Navarro, Trump’s top trade advisor and tariff proponent, a “moron” and “dumber than a sack of bricks.”

Tesla stands to take a significant hit from the president’s proposed tariffs, assuming they don’t get rolled back. Tesla manufactures cars in the U.S. for domestic sales so it’s not subject to the 25% tariff on imported autos, but the hefty levies on other components and materials could be severe.

Tesla relies on suppliers in Mexico and China for items like automotive glass, printed circuit boards and battery cells, among other parts essential for the production of its cars. The company has sought an exemption from the U.S. trade representative for equipment imported from China that it uses in its factories.

WATCH: Tariff fallout hits automakers