Uber Technologies, Inc. on Friday filed suit against its food delivery rival, DoorDash, Inc., accusing DoorDash of anti-competitive business practices that Uber says inflate costs for both restaurants and customers.
In the complaint, Uber alleges that DoorDash, 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,” making it difficult and expensive for restaurants to partner with more than one delivery service and allowing the delivery giant to charge customers higher fees for “lower-quality service.”
“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, reviewed by Business Insider, reads. “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 says DoorDash’s alleged anti-competitive behavior has cost Uber millions in terminated and potential revenue streams. The suit seeks unspecified damages and aims to force DoorDash to change its business practices.
“Uber’s case has no merit,” a DoorDash spokesperson told Business Insider. “Their claims are unfounded and based on their inability to offer merchants, consumers, or couriers a quality alternative.”
As of November, data firm Earnest Analytics reports that DoorDash controls 62.7% of the delivery market nationally, followed by UberEats, which holds 25%, and Grubhub with 6.2%. A 2024 report of mystery shopper data from Intouch Insight, which collected experiences from 300 delivery orders from the three main delivery platforms, found DoorDash leads in customer satisfaction, with the app offering more promotions, delivering to the right location, and delivering the correct food more often than its other major competitors.
The report found that DoorDash also dramatically outperformed its competitors in delivery time, with an average wait of 26 minutes and 24 seconds. Grubhub’s average delivery time was 35 minutes and 49 seconds, while Uber Eats was 38 minutes and 4 seconds, per Intouch Insight.
While demand for third-party delivery services remains high — DoorDash reported an 18% rise in orders year over year in its third quarter of 2024, with revenue growing 25% to $2.7 billion, BI previously reported — criticism over the fees charged by the apps isn’t new. Customers may be charged as much as twice the cost of their meal for ordering using a delivery app compared to menu prices, and some restaurant owners find the apps’ fees cut into their margins too much to be sustainable, BI previously reported.
“We’ve increasingly heard complaints from restaurants that DoorDash’s tactics are limiting that freedom and punishing them for seeking better options,” Sarfraz Maredia, head of the Americas for delivery at Uber, said in a statement to Business Insider. “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.”
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