Democratic senators are calling on the DOJ and FTC to scrutinize Uber's potential acquisition of GrubHub

insider@insider.com (Isobel Asher Hamilton)
Senator Amy Klobuchar is leading the group of Democrats asking for more scrutiny of Uber's potential GrubHub acquisition.
Senator Amy Klobuchar is leading the group of Democrats asking for more scrutiny of Uber's potential GrubHub acquisition.

REUTERS/Lucas Jackson

  • Reports emerged earlier this month that Uber is looking to acquire food-delivery startup GrubHub.

  • A group of four Democratic senators have written to the DOJ and FTC asking the agencies to closely scrutinise the potential deal on antitrust grounds.

  • The senators write the timing is particularly troubling during the pandemic, "when consumer demand has increased and when restaurants are more desperate for revenue than ever."

  • Visit Business Insider's homepage for more stories.

A group of four Democratic senators led by Sen. Amy Klobuchar sent a letter Wednesday to the Department of Justice (DOJ) and the Federal Trade Commission (FTC) asking them to "closely monitor" Uber's potential acquisition of food-delivery startup GrubHub. Senators Patrick Leahy, Richard Blumenthal, and Cory Booker signed the letter along with Klobuchar.

Reports emerged earlier this month that Uber was in talks to acquire GrubHub as a way to bolster its Uber Eats revenues during the coronavirus pandemic — as Uber's main ridesharing business has taken a massive hit while demand for food delivery skyrockets.

"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 senators write. They say that a merger of Uber and GrubHub would mean the two top food delivery in the US — Uber and DoorDash — would control 90% of the market.

"It is 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," the senators add, saying they worry about reports of food-delivery apps charging "exorbitant fees" to restaurants.

The senators say that even out of the context of the pandemic, they would find the merger and resultant duopoly.  "That could mean higher fees, reduced services quality, fewer choices, and less innovation for consumers and the restaurants that serve them."

Uber has taken a big hit from the coronavirus pandemic preventing customers from getting taxis, and has laid off 6,700 staff this year — roughly 25% of its global workforce.

Read the original article on Business Insider