Ride-sharing powerhouse Uber has filed a lawsuit against food delivery giant DoorDash, accusing it of unfair business practices that stifle competition. The lawsuit, filed in California Superior Court, alleges that DoorDash has been pressuring restaurants into exclusive or near-exclusive agreements for its first-party delivery services.
Uber contends that DoorDash has a dominant market share in the U.S. food delivery industry and has used its position to coerce restaurants into working exclusively with it. According to the lawsuit, DoorDash has threatened penalties, removal from its app, or demotion of businesses’ rankings if they refuse.
Specifically, Uber alleges that DoorDash insists on handling orders placed directly through restaurants’ websites, preventing them from offering alternative delivery options. This, Uber claims, limits restaurant owners’ freedom to choose the best delivery partners for their businesses.
DoorDash has dismissed the lawsuit’s allegations as unfounded and based on Uber’s inability to offer a competitive alternative to DoorDash’s services.
Both Uber and DoorDash operate their own white-label delivery services, Uber Direct and DoorDash Drive on-Demand, respectively. These services allow restaurants to manage orders and deliveries through their own platforms while Uber or DoorDash handles the courier logistics. Uber claims that DoorDash’s exclusive deals for first-party delivery services have hindered the growth of its own white-label service.
Uber claims DoorDash controls over 90% of first-party deliveries for large restaurant chains in the U.S. and has used anti-competitive tactics to maintain this dominance. The company says it has received complaints from restaurants that DoorDash is limiting their options and punishing them for seeking alternative delivery providers.
In one instance cited in the lawsuit, Uber alleges that a major restaurant company declined to implement Uber Direct due to threats from DoorDash to increase fees for its third-party delivery services. Uber also claims that multiple restaurants have expressed concern that DoorDash’s practices give them “a gun to their head” and have labeled DoorDash a “monopolist.”
Uber is seeking a jury trial and unspecified damages. The company alleges that DoorDash’s anti-competitive tactics have cost it millions of dollars in revenue and restricted the growth of its white-label delivery services.
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