Restaurants

Grubhub, DoorDash, Postmates, Uber Eats are sued over restaurant prices amid pandemic

Key Points
  • GrubHub, DoorDash, Postmates, and Uber Eats were sued on Monday for allegedly exploiting their dominance in restaurant meal deliveries to impose fees that consumers ultimately bear through higher menu prices.
  • In a proposed class action filed in Manhattan federal court, three consumers said the defendants violated U.S. antitrust law by requiring that restaurants charge delivery customers and dine-in customers the same price, while imposing "exorbitant" fees of 10% to 40% of revenue to process delivery orders.
The GrubHub app Harrer/Bloomberg via Getty Images
Andrew Harrer | Bloomberg | Getty Images

GrubHub, DoorDash, Postmates, and Uber Eats were sued on Monday for allegedly exploiting their dominance in restaurant meal deliveries to impose fees that consumers ultimately bear through higher menu prices, including during the coronavirus pandemic.

In a proposed class action filed in Manhattan federal court, three consumers said the defendants violated U.S. antitrust law by requiring that restaurants charge delivery customers and dine-in customers the same price, while imposing "exorbitant" fees of 10% to 40% of revenue to process delivery orders.

The consumers, all from New York, said this sticks restaurants with a "devil's choice" of charging everyone higher prices as a condition of using the defendants' services.

They said this made it harder to keep tables full even before the pandemic wiped out most dining in restaurants, at least temporarily.

"Plaintiffs bring this claim for relief on behalf of all Americans who would still [like] to enjoy a nice dinner out with their family before defendants make that impossible," the complaint said.

Grubhub, whose businesses include Grubhub and Seamless, and Uber Technologies, which owns Uber Eats, declined to comment.

DoorDash and Postmates did not immediately respond to requests for comment. Lawyers for the plaintiffs did not immediately respond to a similar request.

The lawsuit seeks triple damages, including for overcharges, since April 14, 2016, for dine-in and delivery customers in the United States at restaurants using the defendants' delivery apps.

The case is Davitashvili et al v Grubhub Inc et al, U.S. District Court, Southern District of New York, No. 20-03000.