Four lawmakers warned antitrust watchdogs last week about Uber Technology Inc.’s plans to purchase Grubhub Inc., a rival food delivery company. Led by Sen. Amy Klobuchar (D-Minn.), who raised similar concerns about Facebook’s latest acquisition, the group claimed Uber’s move would “raise serious competition issues.” Uber’s plan to buy Grubhub could contribute to the government’s heightened concerns about antitrust behavior during the ongoing pandemic.
The letter was addressed to the heads of the Justice Department’s Antitrust Division and the Federal Trade Commission (FTC). Both agencies ensure that mergers comply with antitrust law. The lawmakers wrote that while a merger with a competitor like Doordash would result in only 42 percent of the food delivery market, Uber and Grubhub combined would own about 48 percent after the proposed deal. According to Reuters, the merged companies would also have a market advantage in major cities like Atlanta, Boston, New York, and Miami.
One primary concern for the lawmakers involves the various fees charged by delivery companies during a time when restaurants and customers are forced to use these services. “We have been hearing about the exorbitant fees that these online delivery app companies charge to restaurants, which are then forced to pass these excessive costs on to consumers,” they wrote. “It is particularly troubling that this merger is being contemplated during a pandemic, when consumer demand has increased and when restaurants are more desperate for revenue than ever.”