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In-N-Out sues a food delivery startup

Written by Tom Ryan

A third-party service is willing to pay full-price and deliver your goods to a customer for free. Sounds like good deal, right?

Well, In-N-Out filed a lawsuit against food delivery startup DoorDash to stop the service from delivering its burgers without permission because of concerns around quality, food handling and safety.

According to the lawsuit, the burger chain was particularly concerned that the use of the restaurant's logo on DoorDash's website inferred In-N-Out had a relationship with the retailer. The suit charged DoorDash's delivery doesn't meet "the standards that consumers expect" from In-N-Out. The chain says it has no control over the time the delivery will arrive, the food's temperature, overall food handling and the safety practices of DoorDash's drivers.

Like many similar delivery startups, DoorDash uses an Uber-like courier service that relies on freelancers.

DoorDash as well as competitor Postmates have faced similar complaints in the past. One big issue is that, with the implied relationship, any problems around delivery often lead to customer complaints to the restaurant or a negative write-up on Yelp.

DoorDash dasher
Photo: DoorDash

The use of third-party delivery services also upsets the traditional delivery model, including not only the jobs of the restaurant's own drivers but the tips the drivers hand out to kitchen staff.

DoorDash and Postmates also work with restaurants directly for a commission to enhance marketing, create better display menus on their apps, and optimize pick-up and delivery for couriers. DoorDash, which recently received a $1 billion valuation with talk of a potential IPO, earned acclaim for becoming the first third-party service to work with Taco Bell and recently partnered with 7-Eleven to mark its first non-restaurant delivery service.

A DoorDash spokesperson told TechCrunch, in response to the In-N-Out lawsuit, "While we have various relationships with different merchants, we are proud to help people get their favorite food delivered directly to their door."

Despite complaints by others, Sisha Ortuzar, co-founder of Wichcraft, a sandwich chain in New York City, told Eater.com he found DoorDash better at meeting the needs of establishments, while leader Grubhub focused more on customers. Overall, he favors the outsourcing of delivery logistics so restaurants can focus on food. He said of DoorDash, "They've been a great partner."

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