Rideshare giant Uber is coming under fire for its rumored plans to purchase rival company Grubhub — a move that would presumably boost Uber’s dominance in the meal delivery industry.
It prompted U.S. Rep. David Cicilline (D-Rhode Island) to say in a statement that the attempt is nothing short of “a new low in pandemic profiteering.”
As we all continue to stay home during the coronavirus lockdown, demand for getting food brought straight to our doors has increased as people grow tired of cooking and feel compelled to support local restaurants by ordering from them.
Currently, Uber Eats and GrubHub are the second and third-largest food delivery services available, respectively. Now Uber seems eager to take the number one spot from DoorDash through this proposed consolidation.
Cicilline didn’t mince words in criticizing both companies for not providing living wages to drivers and delivery people and “exploiting” independently-owned restaurants with high fees and shady contract language.
If Uber’s acquisition of Grubhub is approved, it would give Uber just over half of the food delivery market share across the U.S., with DoorDash cornering a little over a third of it. But analysts argued that you have to look at how regions and cities might be affected by the deal since both the companies operate all over the country. For instance, in New York City alone Uber would increase its share of the market up to 80%.
What worries local government officials is how this could be another blow to the restaurant industry and its workers, both of which have already experienced major hardships as a result of the pandemic. Another concern is that customers could also be charged higher delivery fees as a result of the deal.
The proposed deal is further complicated by DoorDash’s IPO filing just ahead of the chaos of the coronavirus.