Uber has filed a lawsuit accusing DoorDash of engaging in anticompetitive practices that stifle competition.
The court documents, filed in San Francisco Superior Court, allege that DoorDash uses coercive tactics to force restaurants into exclusive or near-exclusive contracts.
“DoorDash’s underhanded tactics have cost Uber millions of dollars in revenue,” Uber states in the lawsuit.
Uber contends that DoorDash has threatened restaurants with higher fees, reduced search rankings, and even removal from its app unless they agree to use DoorDash’s first-party delivery service, Drive On-Demand, instead of competitors like Uber Direct.
Uber cites multiple cases where restaurant operators either backed out of deals with Uber Direct or terminated existing contracts due to DoorDash’s alleged behavior. In one example, a chain that had agreed to use Uber Direct reversed course after DoorDash threatened to increase its commission rates by 30 percent. Another restaurant reported that it faced removal from the DoorDash app after expressing interest in a partnership with Uber Direct.
“Because many enterprise restaurants receive a large percentage of their Third-Party Delivery orders from the DoorDash App and must pay fees to DoorDash on those orders, restaurants have no choice but to cave to DoorDash’s demands,” Uber states in the court documents. “Restaurants simply cannot afford to be severely penalized or excluded from the DoorDash App, even though succumbing is against their interests regarding First-Party Delivery.”
The lawsuit claims some restaurant executives have privately expressed frustration with DoorDash’s tactics but feel they have no alternative due to DoorDash’s market power.
“When there are co-preferred arrangements with two or more providers, the providers can compete for each delivery (often through an automated auction process), and typically the provider with the fastest delivery time, or best balance of reliability and cost, wins, benefitting both the end-customer and the restaurant,” the lawsuit states.
Uber seeks an injunction to prevent DoorDash from continuing these alleged practices, as well as financial damages for lost revenue.
DoorDash told Reuters, “Uber’s case has no merit. Their claims are unfounded and based on their inability to offer merchants, consumers, or couriers a quality alternative.”
In March 2024, DoorDash controlled 67 percent of third-party delivery sales in the U.S., according to Bloomberg Second Measure. Uber Eats was second at 23 percent.
