Uber technologies has filed a lawsuit on Feb.14 against DoorDash, its rival in the food delivery sector, over anti-competitive practices which, according to Uber, inflate costs for both customers and restaurants.
In its complaint, Uber claimed that DoorDash, which is the largest provider of restaurant delivery services in the United States, has “devised and is engaged in an unlawful scheme to stifle competition with Uber Eats.” This has made it difficult and expensive for restaurants to partner with multiple delivery services, allowing the delivery giant to charge customers higher fees for “lower-quality service.”
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“Restaurants simply cannot afford to stand up to DoorDash, and find themselves powerless to choose the service or services that are best for their businesses in the market for first-party delivery,” the complaint read. “Uber’s restaurant-customers have reported feeling like they have a ‘gun to their head,’ that DoorDash is a ‘monopolist,’ and that they are being bullied by DoorDash. But most restaurants have no meaningful option to resist DoorDash, given the power it wields through the DoorDash App in Third-Party Delivery.”
The complaint also stated that Uber had lost millions in terminated and potential revenue streams because of DoorDash’s anti-competitive practices. While it demanded a jury trial, Uber did not specify the amount it was seeking in damages.
“More than 1 million merchants partner with Uber Eats because we’ve helped them to reach more customers and provided them the freedom to decide how they want to grow their businesses with delivery,” said Sarfraz Maredia, head of the Americas for delivery at Uber.
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“We’ve increasingly heard complaints from restaurants that DoorDash’s tactics are limiting that freedom and punishing them for seeking better options. We hope this filing puts an end to those unfair practices so that restaurants can choose what’s best for them without fear of penalty or retribution,” Maredia added.
DoorDash has denied all allegations, saying “Uber’s case has no merit. Their claims are unfounded and based on their inability to offer merchants, consumers, or couriers a quality alternative.”
At present, according to Earnest Analytics reports, DoorDash controls 62.7% of the delivery market nationally, followed by UberEats which holds 25%, and Grubhub with 6.2%.