Uber has filed a lawsuit against DoorDash, alleging the delivery giant is pressuring restaurants to adopt its “white label” first-party delivery system instead of using third-party platforms like Uber Eats.
As first reported by the Wall Street Journal, the lawsuit, filed on Feb. 14, claims DoorDash is pressuring restaurants to use its solution, Drive On-Demand, which allows locations to offer delivery through their own branded apps or websites.
Uber claims DoorDash is using threats of higher fees and removal from its platform to get restaurants to make exclusive agreements.
Food On Demand reached out to both companies.
In an email, Uber’s Sarfraz Maredia, head of the Americas for Delivery, said, “We’ve increasingly heard from restaurants that DoorDash’s tactics are limiting their options and punishing them for seeking out better alternatives. We hope this filing puts an end to these unfair practices so restaurants can make decisions based on what’s best for them, without fear of penalty or retaliation.”
DoorDash has strongly denied all allegations. In an email to Food On Demand the company said, “Uber’s case lacks merit. Their claims are baseless and reflect its inability to offer merchants, consumers, or couriers a competitive alternative.”
Impact on restaurants
This lawsuit not only ramps up the competition between Uber Eats and DoorDash, it highlights ongoing challenges in the food-delivery industry. Many platforms have struggled to maintain profitability, with some, such as Just Eat Takeaway, scaling back its U.S. operations—including the sale of Grubhub for a fraction of its original value.
It also underscores the important role of both first-party and third-party delivery services for restaurants, many of which do use both to reach a broad customer base.
This comes as DoorDash currently controls 63 percent of the market, while Uber holds about 25 percent, according to Earnest Analytics.
We’ll continue to follow this story as it unfolds.
