Pasadena’s Lucky Boy walk-up burger eatery filed suit today against the Postmates delivery service for allegedly using unfair business practices to penalize the diner for refusing to allow the courier company to deliver its food.
Lucky Boy, which operates its popular roadside grill off of Arroyo Parkway, contends trademark infringement and unfair competition, alleging the delivery service uses its name without authorization and intentionally posts a menu bearing incorrect information for the diner, including lower prices.
Because Lucky Boy refuses to be associated with the app, the delivery service retaliates by offering “alternatives with similar food when Lucky Boy is searched for, and this too diverts business away from Lucky Boy,” according to the suit filed in Los Angeles federal court.
A message seeking comment from San Francisco-based Postmates was not immediately answered.
“Not all restaurants want to be associated or affiliated with third-
party food delivery services,” according to the suit.
A Lucky Boy employee confirmed that the eatery is not affiliated with any on-demand delivery service.
Food courier services like Postmates, DoorDash, Uber Eats and GrubHub have become increasingly popular over the past year due to the coronavirus pandemic. Consumers use an online platform, usually an app, to order, a driver picks up the food at the restaurant and delivers the meal to the customer for an additional charge.
According to the complaint, Postmates “generates revenue by charging delivery service fees to both the consumer and the eating establishment. For example, a restaurant has to pay a commission on the food that it sells and the consumer pays a percentage of the sales price.”
Lucky Boy states it doesn’t want to be in business with Postmates because its service fees are too high.
“Upon information and belief, defendant Postmates charges restaurants approximately 30% of each food order which causes some restaurants to actually lose money,” the plaintiff alleges.
“Also Postmates only pays monthly. The high rates and slow pay are unacceptable. This is especially true in a pandemic when restaurants have faced unprecedented challenges in trying to remain open and pay overhead.”
In July, the City Council approved a temporary cap of 20 percent on total fees and commissions that online and app-based delivery services can charge eateries, including a 15% limit on the delivery-fee portion of an order.
Lucky Boy is a family-owned corporation that has been in business since 1960, founded by two brothers from Greece who started in the San Gabriel Valley after Europe was decimated from war.
There are two Lucky Boy locations in Pasadena: the walk-up diner owned by the plaintiff in the lawsuit and the Walnut Street location, which is licensed to family members.