Pasadena’s Lucky Boy burger stand has settled with Postmates for allegedly retaliating against the eatery for refusing to allow the courier service to carry its food to customers, according to court papers obtained Thursday morning.
Lucky Boy, which operates its popular roadside grill off of Arroyo Parkway, sued for trademark infringement and unfair competition, alleging the food-delivery service used its name without authorization and intentionally posted a menu bearing incorrect information for the diner, including lower prices, as retaliation.
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 Uber-owned Postmates. No further details were immediately available.
Lucky Boy sued in February, alleging that because the eatery refused to be associated with the delivery app, Postmates retaliated by offering “alternatives with similar food when Lucky Boy is searched for, and this too diverts business away from Lucky Boy.”
“Not all restaurants want to be associated or affiliated with third- party food delivery services,” lawyers for the burger stand wrote in court papers.
A Lucky Boy employee said 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 since the start of the coronavirus pandemic last year. 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 costumer for an additional charge.
According to the lawsuit, 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 alleged. “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.”
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.