Uber has initiated legal action against DoorDash, asserting the company engaged in actions that suppressed market competition.
According to the lawsuit, Uber alleges DoorDash used intimidation to coerce restaurant owners into forming exclusive partnerships. The complaint, which was submitted to the Superior Court of California, states that DoorDash, the dominant entity in the U.S. food delivery sector, has been using threats such as hefty financial penalties, removal from the app, or reduced visibility to pressure restaurants.
Uber states DoorDash is pushing eateries to enter exclusive or near-exclusive agreements for first-party delivery services, thereby ensuring DoorDash manages orders made via the restaurants’ own websites.
DoorDash and Uber Eats are widely recognised for their mobile applications that connect restaurants, consumers, and gig workers. These apps enable consumers to order from restaurants, with gig workers delivering the orders.
Both companies also have white-label delivery services, Uber Direct and DoorDash Drive on-Demand, launched in 2020. These services offer a more cost-effective solution for restaurants, allowing customers to order directly from the restaurant’s website or app, while Uber and DoorDash handle the logistics.
Uber’s lawsuit claims DoorDash manages over 90% of first-party deliveries for major restaurant chains in the U.S. and has leveraged anti-competitive strategies to dominate the market.
Moreover, Uber’s lawsuit cites an instance where a “significant restaurant company” allegedly suspended its plans to expand Uber Direct across its brands, because DoorDash threatened to increase its service fees if the restaurant proceeded with Uber Direct.
Uber also claims that numerous customers have expressed feeling threatened by DoorDash’s alleged monopolistic behavior and bullying tactics, with one customer saying they felt “like they have a ‘gun to their head,’ that DoorDash is a ‘monopolist,’ and that they are being bullied by DoorDash.”
Uber is seeking a jury trial but has not specified the amount of damages sought. The company states that DoorDash’s anti-competitive practices have led to “millions of dollars in revenue” losses and have hindered the expansion of Uber Direct.