Uber's acquisition of Grubhub meets opposition from lawmakers

Uber’s attempt to buy Grubhub in a move to build the largest meal delivery company in the US, came under fire from lawmakers, city officials and antitrust experts on Wednesday.

David Cicilline, a congressman who chairs the House antitrust subcommittee investigating the tech sector, said Uber’s takeover attempt “marks a new low in pandemic profiteering”.

“Uber is a notoriously predatory company that has long denied its drivers a living wage,” he said, while noting that Grubhub “has a history of exploiting local restaurants through deceptive tactics and extortionate fees”.

Uber and Grubhub are in talks over a tie-up as the coronavirus crisis accelerates consumer demand for delivery services, according to the Financial Times.

Grubhub did not confirm or deny the reported Uber acquisition talks in a statement, but said that "consolidation could make sense in our industry."

If the acquisition is completed, the combination of both meal delivery firms would hold 55% of the total US market, leaving rival DoorDash with 35%.

Uber and Grubhub could argue that Grubhub would not be able to survive out on its own as Amazon argued recently in the UK, where the Competition and Markets Authority approved an investment in delivery service Deliveroo on the basis that coronavirus-related pressures meant Deliveroo “would fail financially and exit the market” otherwise.

Pierre-Dimitri Gore-Coty, head of Uber Eats: “there is a lot of scepticism out there about the path to profitability that we are on”.