Democratic senators call on regulators to investigate potential Uber-Grubhub deal

Democratic senators call on regulators to investigate potential Uber-Grubhub deal
© Greg Nash

A group of Democratic senators on Wednesday urged antitrust regulators to monitor Uber's potential acquisition of GrubHub and to launch an investigation if any deal goes through.

Multiple outlets reported last week that Uber, which operates Uber Eats, is in discussion to acquire GrubHub in a deal that would consolidate two of the biggest players in the meal delivery business.

"A merger of Uber Eats and Grubhub would combine two of the three largest food delivery application providers and raise serious competition issues in many markets around the country," the lawmakers wrote in a letter to Assistant Attorney General Makan Delrahim and Federal Trade Commission Chairman Joseph Simons.

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Sens. Amy KlobucharAmy KlobucharJudd Gregg: Biden — a path to the presidency, or not Vogue's Anna Wintour urges Biden to pick woman of color for VP Biden should name a 'team of colleagues' MORE (D-Minn.), the ranking member of the Judiciary subcommittee on antitrust issues, Patrick LeahyPatrick Joseph LeahyHouse punts on FISA, votes to begin negotiations with Senate House cancels planned Thursday vote on FISA Frustration builds in key committee ahead of Graham subpoena vote  MORE (D-Vt.), Richard Blumenthal (D-Ct.) and Cory BookerCory Anthony BookerThis week: Senate reconvenes as protests roil nation amid pandemic City leaders, Democratic lawmakers urge Trump to tamp down rhetoric as protests rage across US Sunday shows - George Floyd's death, protests bump COVID-19 from headlines MORE (D-N.J.) called on the regulators to launch an investigation if a deal is met "to ensure that competition is preserved."

The letter cites work from research firm Second Firm reviewing the food delivery market in April.

The analysis found DoorDash as the national food delivery leader, earning 45 percent of meal delivery sales last month.

GrubHub, at 23 percent, and Uber Eats, at 22 percent, were not far behind.

"The merger under negotiation would create a sector in which the top two players control 90 percent of sales," the lawmakers wrote.

"At the local level, the competitive effects of the merger would be felt most intensely. For example, a combined Uber Eats/Grubhub would control 51 percent of the market in Atlanta, 68 percent in Boston, 60 percent in Chicago, 65 percent in Miami, and 79 percent in New York City."

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Food delivery has soared in popularity as the coronavirus pandemic keeps many Americans home.

While Uber saw a record $2.9 billion in losses in the first quarter of 2020, its food delivery business showed significant growth.

Eliminating a direct competitor could boost that business further and spell trouble for other firms.

The lawmakers warned that a potential merger would "likely threaten competition and consumer welfare."

"That could mean higher fees, reduced services quality, fewer choices, and less innovation for consumers and the restaurants that serve them," they wrote.