Lawsuit Claims Delivery Apps Cause ‘Artificially Inflated’ Prices For Meals

A proposed class action lawsuit filed Monday in New York claims that diners have been paying too much for meals delivered by Bay Area-based apps like DoorDash, Postmates, and Uber Eats. The suit contends that the companies are engaging in “anticompetitive conduct” and are acting as “monopolies” that could eventually kill the restaurant industry as we know it.

According to the suit, which was filed on behalf of three New York residents by a small Manhattan law firm, the Bay Area-based food delivery apps, as well as Chicago-based GrubHub, charge customers and restaurants fees that “are shocking when one considers how little value [they] provide to restaurants and consumers” as they “merely offer a list of local restaurants that can easily be found on Google or Yelp for free.”

At particular issue is a “No Price Competition Clause” (NPCC) the suit claims is part of contracts that the apps have with restaurants. As part of that clause, restaurants aren’t allowed to charge a different price for meals that are delivered than they are for meals that in non-crisis times would have been consumed on the premises. This, despite “the different customer experiences and different presentation of those meals (e.g. plating, atmosphere, the meal having been recently cooked)” when dining in as opposed to purchasing the food for delivery, the suit claims. (You can read the entire court filing here.)

“Plaintiffs bring this claim for relief on behalf of all Americans who would still to enjoy a nice dinner out with their family before defendants make that impossible,” the suit reads.

The suit seeks to establish two nationwide classes to join the three plaintiffs currently named in the suit: anyone who bought a meal since April 14 of 2016 directly from a restaurant with a delivery app contract, and anyone who since April 14 of 2016 bought a dine-in meal from a restaurant that used a delivery app service. That’s because, the suit says, “but for defendants’ anticompetitive actions, direct and dine-in consumers would have been offered lower menu prices on their direct and dine-in purchases.” In other words, menu prices in general are, by necessity, inflated in order to allow restaurants to pay off the delivery app companies.

If the classes are certified, the suit would seek triple damages for every alleged “overcharge” since April 14, 2016 for all members of the class, a potentially staggering cost if the number of plaintiffs grows. When contacted for comment, spokespeople from GrubHub, DoorDash, Postmates, and Uber Eats remained silent, as did the attorneys for the plaintiffs.