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Postmates, Uber Eats, Grubhub, DoorDash sued over pricing amid virus outbreak

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Meal delivery services like Postmates, Grubhub, and DoorDash were sued after the restaurants have allegedly imposed higher fees and prices amid the pandemic. Yahoo Finance’s Melody Hahm joins the On The Move panel to discuss.

Video Transcript

JULIE HYMAN: You're watching Yahoo Finance Live. I'm Julie Hyman. We have seen the authorities and various individuals try to police what has been going on during this pandemic in terms of company behavior. And now we are seeing a lawsuit that's being filed against some of the food delivery companies like Grubhub and DoorDash that relates to allegedly inflated prices.

So we've been watching this phenomenon. Melody Hahm is with us. And I know you've been watching this story as well, Melody. This has been sort of an area of contention in the past, at least regarding Grubhub and the fees that they charge to restaurants. But this looks to be a little bit different.

MELODY HAHM: Yeah, and Julie, I do have to say, I am not a lawyer, but the lawsuit feels a bit flimsy, just because it feels like the timing of this is specifically when restaurants are not open, right?

So of course, if there is demand, a lot of these services, specifically in this case, Grubhub, DoorDash, UberEats, and Postmates, are upcharging. That is without question that a lot of the menu prices you're seeing on those apps are higher than you would have normally seen six months ago. And then the in-restaurant prices would be the prices that you're seeing now on the app.

But ultimately, this class action lawsuit is coming from consumers. They're not actually coming from restaurants. Consumers who are saying they are bearing the brunt of that cost exchange when these services are charging between 10% and 40% from the restaurants themselves. Who do the restaurants then pass it on to? The consumers.

So I think this is almost an obvious narrative that we had already fleshed out I think from a consumer perspective. And as you point out, Elizabeth Warren has been pretty vocal about this as well, trying to ensure that the workers involved in the restaurants and the meal prep, as well as the delivery, can be classified and have benefits, especially during this time, where they are seen as essential workers more than ever before.

JULIE HYMAN: We also have talked to an attorney general who was looking into price gouging. So one wonders if, at some point, these consumers would get some support on that front. So we'll keep you posted on this developing situation.