Uber Files Lawsuit Against DoorDash Over Alleged Anti-Competitive Practices
The rivalry in the food delivery industry has escalated as Uber has taken legal action against DoorDash, accusing its competitor of engaging in anti-competitive practices that allegedly limit restaurant choices and stifle competition.
Filed in the Superior Court of California, Uber’s lawsuit claims that DoorDash pressures restaurants into exclusive or near-exclusive agreements for its first-party delivery services, which handle orders placed directly through restaurant websites and apps. According to Uber, these tactics restrict restaurants from working with multiple delivery providers, ultimately harming competition.
Allegations of Unfair Business Practices
Uber alleges that DoorDash employs coercive strategies, including financial penalties and reduced platform visibility, to discourage restaurants from partnering with rivals. The company claims that some restaurant partners have described DoorDash’s approach as akin to having a “gun to their head” and have labelled the company a “monopolist.”
As part of the lawsuit, Uber points to a case involving a major restaurant chain that reportedly abandoned a planned Uber Direct rollout after DoorDash allegedly threatened to increase rates for its third-party delivery services.
Sarfraz Maredia, Uber’s head of delivery for the Americas, stated that an increasing number of restaurant partners have voiced concerns over DoorDash’s practices, saying they feel “punished” for seeking alternative delivery options.
DoorDash Denies Allegations
DoorDash has strongly rejected Uber’s claims, calling them “unfounded.” A spokesperson for the company dismissed the lawsuit as a reflection of Uber’s “inability to provide a better alternative” for restaurants, customers, and couriers.
Potential Industry Implications
The lawsuit highlights the ongoing battle for dominance in the white-label delivery sector, a service both Uber and DoorDash introduced in 2020 to allow restaurants to handle orders through their own platforms while outsourcing delivery logistics.
Uber argues that DoorDash currently controls over 90% of first-party deliveries for the largest restaurant chains in the U.S., a position it claims was gained through unfair market practices.
If Uber wins the case, DoorDash could face significant financial penalties, though the exact damages sought remain unspecified. The court could also force DoorDash to alter its business model, potentially barring it from enforcing exclusivity agreements in first-party delivery contracts.
A ruling against DoorDash could open the door for smaller competitors and create a more competitive landscape. However, such a victory may also bring greater regulatory scrutiny to the entire food delivery industry – a consequence Uber itself might later regret.
