Uber Accuses DoorDash of Bullying Restaurants and Restricting Competition

Allegations and Claims

Uber has taken legal action by filing a lawsuit in California, accusing DoorDash of using unfair tactics to force restaurant partners into exclusive agreements. According to the complaint, DoorDash—already the leading player in the U.S. food delivery market—has allegedly been pressuring restaurants into signing deals that limit their freedom to choose other delivery options. Uber contends that DoorDash uses aggressive methods, such as threatening multimillion-dollar penalties and demotions on its app rankings, to ensure that restaurants commit solely to handling orders placed through their own websites. This strategy, Uber claims, effectively sidelines alternatives like Uber Direct, its own white-label service launched in 2020, thereby stifling competition and costing Uber millions in revenue.

Fierce Market Rivalry and Industry Dynamics

Both Uber Eats and DoorDash have built their reputations on connecting consumers with a variety of restaurant options through user-friendly apps, which also serve as a gateway for gig economy workers. Beyond the well-known consumer apps, the two companies also compete in the white-label delivery space. Services like Uber Direct and DoorDash Drive on-Demand are designed to help restaurants manage deliveries directly from their own websites, often at a lower cost than third-party options. Uber alleges that DoorDash’s dominance extends even into these first-party delivery deals, claiming that over 90% of the largest restaurant chains have been locked into DoorDash’s ecosystem. This, according to Uber, is the result of anticompetitive practices that have not only hurt its revenue but also curtailed the growth potential of its direct-delivery service.

Impact on Restaurants and Industry Response

The lawsuit highlights the broader implications for restaurant partners caught in the middle of this high-stakes competition. Uber cites multiple instances where restaurants have felt coerced by DoorDash’s practices—describing the pressure as akin to having “a gun to their head.” In one detailed example, an influential restaurant group reportedly backed out of a planned rollout of Uber Direct after DoorDash allegedly threatened to raise its fees for third-party services. Uber’s statement emphasizes that its platform empowers over a million merchants, offering them the flexibility to decide how best to expand their delivery options. Meanwhile, DoorDash has dismissed these allegations, labeling them as unfounded and merely a reflection of Uber’s inability to provide a competitive alternative. With a jury trial now requested, the case is set to shine a light on the competitive tactics in the booming food delivery market and the real-world impact on restaurants striving to maintain control over their service options.