Analysis of information sources in references of the Wikipedia article "Grubhub" in English language version.
The New York customers, who seek class-action status, say the delivery services charge 'exorbitant fees' that range from 13% to 40% of revenue, while the average restaurant's profit ranges from 3% to 9% of revenue, making delivery meals more expensive for eateries. 'Restaurants could offer consumers lower prices for direct sales because direct consumers are more profitable,' the plaintiffs said. 'This is particularly true of dine-in consumers, who purchase drinks and additional items, tip staff, and generate goodwill.'
Each of the firms uses 'monopoly power' to prevent competition, limit consumer choice and force restaurants to agree to illegal contracts that have 'the purpose and effect of fixing prices,' the suit claimed. ... The four companies give restaurants a 'devil's choice' that requires them to keep dine-in prices the same as delivery prices if they want to be on the app-based delivery platforms, the suit claimed. And restaurants must pay commissions to the delivery firms ranging from 13.5% to 40%, the suit alleged. ... Establishments are forced to 'calibrate their prices to the more costly meals served through the delivery apps,' the suit alleged.
Frank points to a clause in the contracts restaurants and the food delivery apps agree to that prohibits owners from charging delivery customers more than people who dine in, even though delivery costs more. 'By not forcing those purchasing on apps to bear the whole amount of the fees, instead of forcing all menu prices to rise together, in-restaurant diners are effectively subsidizing Grubhub's high rates,' said Frank, who argues such an arrangement is anti-competitive and illegal.
GrubHub, DoorDash, Postmates and Uber Eats were sued on Monday for allegedly exploiting their dominance in restaurant meal deliveries to impose fees that consumers ultimately bear through higher menu prices, including during the coronavirus pandemic. In a proposed class action filed in Manhattan federal court, three consumers said the defendants violated U.S. antitrust law by requiring that restaurants charge delivery customers and dine-in customers the same price while imposing 'exorbitant' fees of 10% to 40% of revenue to process delivery orders. The consumers, all from New York, said this sticks restaurants with a 'devil's choice' of charging everyone higher prices as a condition of using the defendants' services.
Frank points to a clause in the contracts restaurants and the food delivery apps agree to that prohibits owners from charging delivery customers more than people who dine in, even though delivery costs more. 'By not forcing those purchasing on apps to bear the whole amount of the fees, instead of forcing all menu prices to rise together, in-restaurant diners are effectively subsidizing Grubhub's high rates,' said Frank, who argues such an arrangement is anti-competitive and illegal.
Each of the firms uses 'monopoly power' to prevent competition, limit consumer choice and force restaurants to agree to illegal contracts that have 'the purpose and effect of fixing prices,' the suit claimed. ... The four companies give restaurants a 'devil's choice' that requires them to keep dine-in prices the same as delivery prices if they want to be on the app-based delivery platforms, the suit claimed. And restaurants must pay commissions to the delivery firms ranging from 13.5% to 40%, the suit alleged. ... Establishments are forced to 'calibrate their prices to the more costly meals served through the delivery apps,' the suit alleged.
GrubHub, DoorDash, Postmates and Uber Eats were sued on Monday for allegedly exploiting their dominance in restaurant meal deliveries to impose fees that consumers ultimately bear through higher menu prices, including during the coronavirus pandemic. In a proposed class action filed in Manhattan federal court, three consumers said the defendants violated U.S. antitrust law by requiring that restaurants charge delivery customers and dine-in customers the same price while imposing 'exorbitant' fees of 10% to 40% of revenue to process delivery orders. The consumers, all from New York, said this sticks restaurants with a 'devil's choice' of charging everyone higher prices as a condition of using the defendants' services.
The New York customers, who seek class-action status, say the delivery services charge 'exorbitant fees' that range from 13% to 40% of revenue, while the average restaurant's profit ranges from 3% to 9% of revenue, making delivery meals more expensive for eateries. 'Restaurants could offer consumers lower prices for direct sales because direct consumers are more profitable,' the plaintiffs said. 'This is particularly true of dine-in consumers, who purchase drinks and additional items, tip staff, and generate goodwill.'
