Protect Our Restaurants Coalition Urges FTC to Investigate Predatory Delivery Apps
Washington, D.C. — Today, the Protect Our Restaurants coalition sent a to the Federal Trade Commission urging it to initiate an investigation into delivery app corporations and apply remedies where appropriate for their anticompetitive, predatory, and fraudulent behavior. The letter includes extensive information about three dominant corporations — Grubhub, Postmates/UberEats, and DoorDash/Caviar/OrderAhead — and specific anticompetitive practices that deserve the Commission’s attention.
“During the COVID-19 pandemic, delivery app corporations took advantage of small and independent restaurants that were relying on delivery services to stay afloat,” said Moe Tkacik, Senior Fellow at the American Economic Liberties Project. “The pandemic exposed the many ways these apps break the law, abuse restaurants, exploit workers, and mislead consumers. Thankfully, cities and communities across the U.S. are taking action to rein in some of these abuses, but the FTC has the power to investigate all of their anticompetitive and exploitive tactics and apply rules to stop them.”
As the letter details, the delivery app companies, while superficially engaged in competition, have shown little interest in actually competing. Fees are extremely high, service is poor across the board, and delivery apps that distinguished themselves through superior training and service have all been either acquired by one of the big three or compelled to adopt their business model. Delivery apps have built a business model that relies on hijacking customers in order to coerce restaurants into turning over some of their hard-won profits to tech middlemen.
With the help of Protect Our Restaurants, more than 70 cities, states, and municipalities temporarily capped the fees apps were allowed to charge restaurants during the pandemic as a way to aid those businesses. But caps can’t fix all of the delivery apps’ abuses. Policymakers and regulators must step in.
Learn more about Protect Our Restaurants .
The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.