Uber Tech angrily sues Doordash, accusing it of anti-competitive behavior in the food delivery market

According to Zhitong Finance APP, Uber (UBER.US) filed a lawsuit in California on Friday, accusing its competitor, the food delivery service DoorDash (DASH.US), of anti-competitive behavior. Uber stated that its biggest competitor in the food delivery market is forcing restaurants to exclusively partner with them by threatening to impose penalties or lower restaurant rankings in the DoorDash app. The lawsuit claims that the alleged anti-competitive behavior by DoorDash has resulted in Uber losing millions of dollars in existing and potential revenue. Uber is seeking unspecified damages and is asking the court to rule to compel DoorDash to change its business practices. Sarfraz Maredia, head of Uber Eats for the Americas, stated, "Restaurants across the country tell us that DoorDash's bullying tactics leave them with an impossible choice: either yield to their demands or pay the price. We are taking legal action because competition should empower restaurants." DoorDash responded on Friday, stating, "Uber's lawsuit is baseless. Their claims have no factual basis and reflect their inability to provide quality alternatives for merchants, consumers, or delivery drivers." Uber added that last year a major restaurant company "suddenly notified" them that it would not launch services for multiple brands on the Uber platform. "This decision directly stemmed from DoorDash's punitive threat to raise commission rates," Uber stated in court documents. The ride-hailing company claimed that DoorDash also threatened to impose "penalty fees," which would increase costs by 10% to 30% if customers chose to use services from both companies simultaneously. DoorDash denied these allegations. Following intensified competition during the COVID-19 pandemic, this lawsuit opens a new front in the battle for market share between the two companies in the rapidly growing food delivery service market. It is understood that DoorDash Drive allows restaurants and takeout chains to operate their own branded apps and websites, but all delivery logistics are handled by DoorDash. Customers are charged a fee per order. DoorDash launched its so-called "first-party platform service" in 2016, while Uber launched its version, "Uber Direct," four years later. A significant portion of revenue for both companies comes from services provided to restaurants, including delivery fees and advertising fees on their respective platforms. Earlier this month, Uber announced its second quarterly report achieving profitability for the full year, while DoorDash reported its second quarterly profit since going public in 2020. A report from data company Earnest Analytics showed that as of last November, DoorDash held a 62.7% share of the national delivery market in the U.S., followed by Uber Eats (25%) and Grubhub (6.2%). A 2024 mystery shopper data report released by Intouch Insight indicated that DoorDash leads in customer satisfaction, offering more promotions, accurate delivery locations, and a higher frequency of correct food deliveries compared to other major competitors The report also pointed out that DoorDash significantly outperforms its competitors in delivery times