Washington, D.C. — A coalition of 35 independent restaurants and economic justice organizations today launched Protect Our Restaurants, a new organizing campaign aimed at exposing the unfair and uncompetitive practices used by dominant delivery apps to exploit small businesses, workers, and consumers. The campaign arrives as Uber aims to finalize its deal to buy Postmates, which, if approved, would further consolidate the delivery app sector to just three major players: DoorDash, GrubHub, and UberEats.
“Restaurants are dependent on delivery apps for both sales and visibility, yet they have no power in setting or negotiating commission rates,” said Katy Connors, Chair of the Advisory Board for the Portland Independent Restaurant Alliance and director of operations for Hat Yai. “Delivery apps like to position themselves as ‘partners,’ but they have proven to be exploitative and their egregious rates leave restaurants with little to no profit. Policymakers must act to curb their predatory practices or millions of restaurants simply will not survive.”
DoorDash, GrubHub, Postmates, and UberEats control 98 percent of all food delivery sales. At the local level, the market is often more concentrated; in many cities, just two of the apps dominate. They use a variety of unsavory tactics, including charging exorbitant fees, usurping tips, creating impostor websites and faking restaurant phone numbers, to extract wealth from the already low-margin food-service industry. And as an ongoing class action lawsuit alleges, these dominant apps also force restaurants to guarantee that their prices will be the same in-person and on the apps, limiting competition between the different platforms. With COVID-19 forcing restaurants to end in-person dining and demand for takeout surging, the situation has only gotten worse. Restaurants struggling to stay open are now beholden to predatory middlemen taking cuts from every end.
By mobilizing independent restaurants to engage their local elected officials and federal antitrust enforcers, the Protect Our Restaurants campaign aims to put an end to the dominant apps’ abuse and monopoly power. The campaign website, ProtectOurRestaurants.com, features resources such as an organizing guide with step-by-step instructions for passing city-wide caps to the commission fees delivery apps charge restaurants. The website also includes a letter the campaign will be sending to the Federal Trade Commission, encouraging the agency to investigate the apps. The Protect Our Restaurants campaign also released a social media toolkit equipped with sample Twitter and Facebook posts, as well as graphics.
Campaign partners include: the American Economic Liberties Project, the American Sustainable Business Council (ASBC), the Institute for Local Self Reliance (ILSR), A Baked Joint (Washington, D.C.), Alfred Restaurant Group (Bethesda, MD), BGBR (Pittsburgh, PA), Brasserie Liberté (Washington, D.C.), Center for Digital Democracy, Copperwood Tavern (Arlington, Virginia), Doña Dona (Washington, D.C.), Duo Restaurants (Denver, CO), Family Farm Action Alliance, Fiola Mare (Washington, D.C.), Gaetano’s (Denver, CO), Gig Workers Rising, The Glass Jar Restaurant Group (Santa Cruz, California), The Golden Gate Restaurant Association, The Greedy Hamster (Denver, CO), The Grove Wine Bar and Kitchen (Austin, Texas), Holy Grail Pub (Plano, TX), The Illinois Restaurant Association, Ivy & Coney (Washington, D.C.), Keith Miller (Franchisee Advocacy Consulting and Subway Owner), Kesté Pizza & Vino (New York, New York), Ladd Taphouse (Portland, OR), The Lexington House (Los Gatos, CA), Lombardino’s Italian Restaurant (Madison, WI), Moreland’s Tavern (Washington, D.C.), Pod (Philadelphia, PA), The Portland Independent Restaurant Alliance, Silvan Ridge Winery (Eugene, OR), South Philly Barbacoa (Philadelphia, PA), SPOON (Pittsburgh, PA), Twisted Soul Cookhouse and Pours (Atlanta, GA), and Via Sophia (Washington, D.C.).
“The delivery apps have raked in billions by copying Amazon and brazenly flouting antitrust laws,” said Sarah Miller, Executive Director of the American Economic Liberties Project. “Their business is one built on the extortion and exploitation of restaurants, workers, and consumers. It’s time policymakers at all levels of government take action.”
“Cities are waking up to the fact that these big delivery apps are using their market power to exploit restaurants and take money out of the local economy,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance. “In many cases, these apps are taking more revenue from restaurants than their hard-working owners and employees are earning. It’s time for this abuse to stop.”
“As a former restaurateur, I have watched third-party restaurant delivery apps encroach on restaurants for years,” said Carolyn Pincus of the American Sustainable Business Council. “These firms currently deploy unethical and disingenuous tactics, breeding mistrust throughout the industry. Fortunately, there are a number of policy recommendations we are advocating for that, if enacted by the government, would bring confidence and integrity back to the industry, to ensure a fair and competitive marketplace for all.”
Read “Restaurants are barely surviving. Delivery apps will kill them.” here.
Read “Biting Back: Delivery Apps are Gobbling Up Restaurant Revenues, and Cities Have Had Enough” here.
Read “Report: 26 Actions Local Leaders Can Take to Help Small Businesses Weather the Pandemic” here.
Learn more about Economic Liberties here.
Learn more about the Institute for Local Self-Reliance here.
Learn more about the American Sustainable Business Council here.
About the Institute for Local Self-Reliance:
The Institute for Local Self-Reliance has a vision of thriving, equitable communities. ILSR believes the biggest challenge in the U.S. today is corporate control because it diminishes community power and undermines the strength of our democracy and our local economies. We are a national research and advocacy organization that partners with allies across the country to build an American economy driven by local priorities and accountable to people and the planet. ILSR.org