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Delivery man riding by a posted sign with safety instructions in Bushwick Avenue. The NYPD has closed main streets to car traffic in Bushwick during the day, allowing people to properly exercise social distancing while walking the streets during the pandemic.
Erik McGregor | Getty Images
DoorDash, Grubhub and Uber Eats filed a lawsuit against New York City on Thursday over a new bill passed by city council that would make the emergency delivery charge caps installed during the pandemic permanent.
The lawsuit, filed in federal court in the Southern District of New York, alleges that the price controls required under the new law “will not only harm the plaintiffs, but also the revitalization of the very local restaurants the city claims to serve.” . The companies say the law is unconstitutional because “it interferes with freely negotiated contracts between platforms and restaurants by changing and dictating the economic conditions under which a vibrant industry operates.”
The companies claimed that the choice of a cap of 15% for delivery services and 5% for non-delivery services is arbitrary. They said restaurants have many options to conduct their business without using the apps and are not pressured into using their services if they feel the prices are too high.
The plaintiffs also said they “compete vigorously” not only with each other, but with online advertising companies like Google and Yelp, which are not subject to the 5% cap on non-fees. delivery.
Caps on food delivery charges spread in cities like New York City during the early stages of the coronavirus pandemic, when restaurants were among the hardest hit by government-imposed closures. They relied heavily on delivery to at least maintain some income.
The New York City Council voted in late August to extend those fee caps indefinitely, preventing platforms from charging restaurants what the bill’s sponsors saw as excessively high fees.
The delivery platforms are asking for an injunction that would prevent the application of the law. They want the court to declare the bill unconstitutional and also seek damages from the city.
The lawsuit follows a similar lawsuit by DoorDash and Grubhub against San Francisco, which also introduced a permanent 15% cap on delivery charges.
Representatives of the mayor’s office and the bill’s sponsor did not immediately respond to requests for comment.
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