Ride-Share giant Uber filed a lawsuit against Doordash on Friday, denounced the stifling competitive delivery outfit for threatening restaurant owners to exclusive deals.
Uber claims that in a lawsuit filed in California Superior Court, its major rival bullyed restaurants and dealt only with Doordash. Uber claims Doordash, which holds the largest share in the US food delivery market, threatens restaurants with multi-million dollar penalties or removal or demoting of business status on the Doordash app.
Specifically, Uber claims that Doordash Pressures restaurants will pressure them to attack exclusive or near-exclusive contracts for first-party distribution services. That is, Doordash insists on processing only orders placed via the restaurant’s website, Uber says.
“There’s no benefit in the Uber case,” a Doordash spokesman said in an email to TechCrunch on Friday. “Their claims are based on their lack of basis and inability to provide quality alternatives to merchants, consumers or couriers.”
Doordash and Uber Eats are best known for their respective apps connecting restaurants, consumers and gig economy workers. Consumers use the app to find and order foods such as pizza, egg rolls, and pad thai. The gig economy workers then pick up and deliver the food to the consumer.
However, the two companies are also competing with their own white-label distribution service (called Uber Direct and Doordash Drive), launched in 2020. These services are cheap for restaurants and will allow you to order directly through the restaurant’s app. Websites, Uber and Doordash, manage behind-the-scenes courier companies.
Uber claims Doordash handles first-party delivery for more than 90% of America’s largest enterprise restaurants, and claims Doordash used anti-competitive practices to beat the market.
“Over 1 million merchants are partnering with Uber Eats, so we are free to help them reach more customers and how they want to grow their business with delivery. “We provided them with the decision to decide,” he said in an emailed statement. “We’ve been hearing more and more complaints from restaurants that Doordash’s tactics limit their freedom and punish them for a better option. This filing means that restaurants do not fear penalties or retaliation. We hope to put an end to these unfair practices so that we can choose the one that is best for us.”
In an example of the lawsuit, Uber says the unnamed “significant restaurant company” won’t move forward due to the long-standing lack of Uber Direct across several restaurant brands. The reason Uber claims is that it is said that Doordash threatened to raise the fees it charges its restaurant companies to use Doordash’s third-party streaming services if it continues to use Uber Direct.
Uber says this is not a one-off event, and that multiple customers say they feel they have a “gun on their head.” . ”
Uber has requested a ju trial. The company did not specify the amount of damages for the complaint. However, Uber argues that these anti-competitive practices cost the company’s “millions of dollars in revenue” and limited Uber’s growth.
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