DoorDash, GrubHub and others argue that city law capping fees at 15% has cost them «hundreds of millions of dollars.»
The nation’s biggest food delivery services including Uber Eats and DoorDash are suing New York City, arguing that a fee cap first enacted during the pandemic is costing them «hundreds of millions of dollars.» The Big Apple last month implemented a permanent cap of 15% per delivery from places like Grubhub. Lawmakers first enacted the limit as a temporary measure during the pandemic, with the intent that it would steer more money toward family-owned restaurants that were hit hard by the coronavirus. But in a lawsuit filed late Thursday, the food delivery apps said the 15% limit was arbitrary and unconstitutional and would force them to shift costs to delivery customers. «The ordinance is unconstitutional because, among other things, it interferes with freely negotiated contracts between platforms and restaurants by changing and dictating the economic terms on which a dynamic industry operates,» the lawsuit, filed in New York’s Southern District, states. The food delivery services are asking a Manhattan judge for a temporary injunction and an unspecified amount in damages. Mark Gjonaj, a New York City Council member who pushed for making the cap permanent, told the Wall Street Journal that the council intends to move forward with the fee limits.
