Sep 6, 2020

Anti-Competitive Policies Spiked Online Food Delivery Prices


What Are The Causes Of The Recent Spike In Food Costs?

Attorney Michael Ehline pictured in front of the Department of Transportation Hearing Chamber. 1200 New Jersey Ave SE, Washington, DC 20590.Since the start of the COVID pandemic, more Americans than ever have been reliant on food delivery services. This is due to any number of reasons, including fear of going outside. Furthermore, the rise of the internet and cell phones also make it much easier for people to order food, especially for those in large cities. Large food delivery services like Uber Eats, GrubHub, and Postmates have soared since March of this year.

The causes of the increase in food prices are multifaceted. Perhaps they had something to do with the increase of general food prices, especially meat, since the start of the Coronavirus. Furthermore, there have been significant issues with transport due to the spread of the virus. Put it all together, and that may explain just a part of this. However, the largest share of the increase is likely due to anti-competitive practices on behalf of these companies.

All of this is likely bad news for consumers. Since many of us need food delivery to continue our current lifestyle, these companies may be taking advantage of the need. This is often a terrible sign for competitiveness and for prices in general. Considering the high level of trust many people put in these companies, the idea of purposefully using anti-competitive tactics to inflate prices is a major concern on many different levels.

And if the allegations are true, it is also a breach of trust during a time when we use their services the most. And it is a real concern that these aspects are used again and again for the same reasons. This could be for the same effect. Below we have more info on the food delivery shenanigans.  Michael Ehline is the lead attorney of a key civil rights and product liabilities law firm based out of Southern California. From Los Angeles, the Ehline Law Firm Personal Injury Attorneys APLC are trusted for the main reason. We specialize in a number of major legal fields, including those that aid consumers when taken advantage of.

This can include the aftermath of car accidents, after a botched surgery, or even rising prices through illegal practices. We study it all and are always concerned about the well being of both our clients and the general public. That is why Michael Ehline writes this column, as a means to better inform the public. He hates the idea of large companies taking advantage of anyone-- from a simple meal all the way up to the white-collar crime.

There is a reason why many of these companies attempt to get away with such actions-- they think that the general public will not fight back. We tire of that attitude. We want to fight on behalf of those who need the advice of counsel. Furthermore, our team studied a number of legal precedents and corporate law. The example of delivery services is just one of the anti-competitive practices during the decades of legal experience. And each of them is completely unacceptable to me. Consumers deserve better. Continue reading more below or reach out to me for more info. Our firm's phone number is below, or feel free to reach out to us 24 / 7 at losangeles@ehlinelaw.com. Or read more about our legal musings at our legal blog here.

What Are The Roots Of The Rising Costs?

As we mentioned above, there could be perfectly reasonable explanations for a portion of the increase in the prices of food. However, most likely, these major companies used their influence and reach to drive up prices artificially. Companies such as Uber Eats, GrubHub, and Postmates are all a major concern-- especially considering the sheer number of people who have become reliant on these types of services. The companies did so in several ways.

As a matter of fact, the company used its business methods to raise prices on restaurants that cooperate with these services. These fees are often not negotiated with the restaurants themselves-- often with consternation of small businesses. Furthermore, this also leads to some prices being higher on online platforms than on the paper menu at the restaurant. This is all part of an anti-trust lawsuit against the three companies.

Four residents of New York make their feelings clear in the lawsuit-- and it appears that they have some legal weight behind them. According to the suit, "Defendants do this because if the restaurants were to offer lower prices for sales outside each defendant’s platform, then such pricing would reduce the restaurants’ sales on the platform and reduce the defendant’s profits,” Some of the increases are as much as 20% higher than the actual menu price.

Taking Advantage of Smaller Restaurants And Chains.

Unfortunately, the tactics of these large delivery services often fly in the face of what consumers and these other restaurants expect. With commission rates running as high as 30% on each order, some restaurant chains have found a workaround that appears to conflict with allegations made in this lawsuit, according to reporting by Nation’s Restaurant News. To offset hefty third-party delivery fees, chains including Del Taco, Taziki’s Mediterranean Café, Noodles & Company, and El Pollo Loco have openly acknowledged that they charge higher prices on third-party delivery platforms in order to make that ordering channel profitable.

In-house prices, listed in-store or on their branded digital channels, are not inflated. If this suit is accurate, none of this is acceptable. It also means that there could have been collusion between the three companies. At least in their tactics, if not explicitly. It also appears that this issue has only grown since the growth of the companies. And the start of the pandemic. All of this means that consumers strike out-- leaving them with fewer real options and fake ones from these large corporate delivery services. We deserve better. And we should demand better.

Hopefully, they will fix their mistakes rather than dig in their heels and make the matters worse.

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