In February 2021, Pasadena burger stand Lucky Boy sued third-party delivery app Postmates for trademark infringement and unfair competition.
Known for its epic breakfast burritos, the walk-up eatery on Arroyo Parkway claimed that the Uber-owned delivery app penalized it for refusing to allow the company to deliver Lucky Boy's food to customers, according to Pasadena Now. The suit alleged that Postmates used Lucky Boy's name without authorization and intentionally posted a menu bearing incorrect information for the diner, including lower prices.
Lucky Boy also alleged that because it refused to be associated with the app, Postmates retaliated by offering "alternatives with similar food when Lucky Boy is searched for," diverting business away from Lucky Boy.
It isn't the only restaurant that's unhappy with delivery apps' business practices. Postmates (and the other "Big Four" food delivery apps: Grubhub, UberEats and Doordash, which owns Caviar) make money on both ends. They charge delivery service fees to consumers and take commissions from the restaurants — typically between 15% and 30% — for each order.
In our August 2020 story about the challenges restaurants face with third-party delivery apps, many establishments — from Casa Vega in Sherman Oaks to Burgers Never Say Die in Silver Lake — told LAist they've either minimized their use of these apps, rejected them entirely or shifted to lower cost alternatives.
"Every time a delivery app service contacts us, I respond with the following: 'If you can give me [a] 10% [commission deal] on every order, we can continue this conversation,'" Burgers Never Say Die founder Shawn Nee told us. "We either never hear back from them, or we get some spiel about 'corporate' and how they won't let us go that low."
Even restaurants that use third-party food delivery apps often encourage customers to place their orders directly by calling the restaurant.
Whatever differences Lucky Boy and Postmates have, it looks like they've patched things up — and by "patched things up," we mean money changed hands.
In a notice of voluntary dismissal, filed in Los Angeles federal court Wednesday, attorneys for Lucky Boy state that the eatery has entered into a settlement agreement with Postmates. In layperson's terms, it looks like Postmates paid Lucky Boy to drop the lawsuit. But no other details are currently available.
Lucky Boy, which was founded in the San Gabriel Valley in 1960 by two brothers who had left Greece after World War II, survived a kitchen fire in early 2019. The other location, on Walnut Street, is licensed to family members. Lucky Boy remains unaffiliated with any on-demand delivery app.
(Full Disclosure: Lucky Boy is only a couple of blocks from LAist/KPCC HQ so it's a favorite around here, especially before the pandemic when we are all working in the office. Do not mess with our beloved breakfast burrito.)
