DoorDash Inc. asked a California judge to dismiss Uber Technologies Inc.’s anticompetition lawsuit against it, arguing that Uber is using an “ill-fitting” state law to justify its claims.
DoorDash, which has two-thirds of the U.S. food delivery market, argued in a statement about their filing in state court in San Francisco that Uber’s February lawsuit is “nothing more than a cynical and calculated scare tactic.”
At the heart of the allegations are the white label delivery services that both companies have been expanding to increase their revenue. These offerings allow restaurant chains to build delivery ordering into their own websites and apps, so customers can use their technology and couriers without having to go to the Uber or DoorDash apps or website.
In February, Uber alleged in a lawsuit that DoorDash uses “coercive” practices such as threatening restaurants with multimillion-dollar penalties, or demoting restaurants’ positions on the DoorDash app if they didn’t agree to exclusive or near-exclusive use of its white-label delivery offering. That has stifled competition with Uber’s own delivery service, costing it millions of dollars in revenue, Uber said.
DoorDash denies the allegations, saying it “competes fiercely yet fairly” and that merchants have the choice of which providers they work with. “Instead of competing through innovation, Uber has resorted to litigation. Uber is trying to deter merchants from working with us and use legal threats to win business it hasn’t earned.”
A DoorDash lawyer said in an interview that Uber isn’t using federal or state antitrust laws to make its claims, instead using what the company believes is an ill-fitting state law typically applied to employee noncompete provisions.
“It seems like the team at DoorDash is having a hard time understanding the content of our complaint,” a spokesman for Uber said in response to DoorDash’s filing. “When restaurants are forced to choose between unfair terms or retaliation, that’s not competition — it’s coercion. Uber will continue to stand up for merchants and for a level playing field. We look forward to presenting the facts in court.”
DoorDash is targeting a July hearing on the motion, its attorney said, but the specific date will ultimately be determined by Superior Court Judge Christine Van Aken.
Top photo: A DoorDash sign on a restaurant in New York, on Monday, April 29, 2024. Photographer: Yuki Iwamura/Bloomberg.