Democrats Want Probe Of Possible Uber-Grubhub Merger

Sen. Amy Klobuchar (D-Min.) wants officials to look into potential antitrust violations involving Uber’s possible acquisition of Grubhub as the two companies remain in discussion.

The letter, addressed to Assistant Attorney General Makan Delrahim and Federal Trade Commission Chairman Joseph Simons, the country’s top antitrust officials, asked them to make sure the merger wouldn’t lead to too much of a monopoly on the food delivery business.

According to the letter, Uber Eats, Grubhub, and DoorDash can claim 20 percent, 28 percent, and 42 percent of the online food delivery space between them respectively. A potential merger, while not yet a sure thing, would net Uber Eats and Grubhub a 79 percent stronghold in New York City.

The lawmakers also cited concerns about the high fees that have been reportedly charged to restaurants by companies like Uber, which could turn into even more leverage over consumers, restaurants and employees if more power is consolidated.

Delivery fees range from 10 percent to as much as 40 percent, and the pandemic’s crunch on finances has seen local governmental bodies working to institute caps on the fees allowed, at least until the pandemic eases and the economy begins to recover.

For its part, Grubhub has told Uber there won’t be any deal for an acquisition at the time being. Uber offered a deal of 1.9 of its shares for every one of Grubhub’s shares, which the latter company didn’t go for – Grubhub preferred a deal for 2.15 of Uber’s shares.

However, negotiations are still at play, and Uber CEO Dara Khosrowshahi has signaled he may be willing to go up to 1.95 per share.

The letter said it was “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,” and hoped an investigation would be launched if the two companies did agree to merge, CNBC reported.

Fellow Democratic Senators Patrick Leahy of Vermont, Richard Blumenthal of Connecticut and Cory Booker of New Jersey also signed onto Klobuchar’s letter.