Four Democratic U.S. senators warn against Uber buying Grubhub

FILE PHOTO: Uber’s logo is pictured at its office in Bogota, Colombia, December 12, 2019. Picture taken December 12, 2019. REUTERS/Luisa Gonzalez/File Photo

WASHINGTON (Reuters) – Four Democratic lawmakers, led by Senator Amy Klobuchar, wrote to antitrust enforcers on Wednesday to warn that plans by Uber Technologies Inc (UBER.N), owner of Uber Eats, to buy rival online food delivery company Grubhub Inc (GRUB.N) would “raise serious competition issues” in many cities.

In their letter, the lawmakers said the deal would give Uber and Grubhub 48 percent of the U.S. market, while Doordash would have 42 percent. A merged Uber Eats and Grubhub would have 79 percent of the market in New York, 68 percent in Boston, 65 percent in Miami, 60 percent in Chicago and 51 percent in Atlanta.

“We have been hearing about the exorbitant fees that these online delivery app companies charge to restaurants, which are then forced to pass these excessive costs on to consumers,” the lawmakers wrote. “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.”

News broke on May 12 that Uber had approached Grubhub with an offer for an all-stock deal. Uber did not immediately respond to a request for comment on the letter.

The letter from Klobuchar, the top Democrat on the Senate Judiciary Committee’s antitrust panel, as well as Senators Patrick Leahy, Richard Blumenthal and Cory Booker was addressed to Makan Delrahim, head of the Justice Department Antitrust Division and Joseph Simons, head of the Federal Trade Commission. The two agencies ensure that mergers comply with antitrust law.

Reporting by Diane Bartz; Editing by David Gregorio

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