Delivery man circulating a sign posted with safety instructions on Bushwick Avenue. NYPD closed the main streets to vehicular traffic in Bushwick during the day, which allowed 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 for a new bill passed by City Hall that would allow emergency spending limits to be set during the pandemic permanently.
The lawsuit, filed in federal court in the southern district of New York, alleges that the price controls required by the new law “will harm not only the plaintiffs, but also the revitalization of the local restaurants the city claims to serve.” Companies claim the law is unconstitutional because it “interferes with freely negotiated contracts between platforms and restaurants by changing and dictating the economic terms on which a dynamic industry operates.”
The companies claimed that the selection of a 15% tariff limit for delivery services and a 5% limit for delivery services is arbitrary. They said restaurants have many options available to manage their businesses without using apps and that they are not required to use their services if they feel the prices are too high.
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% delivery rate limit.
Limits on food shipping costs spread to cities like New York during the early stages of the coronavirus pandemic, when restaurants were hardest hit by government-forced closures. They relied heavily on delivery to maintain at least some revenue.
The New York City Council voted in late August to extend these rate limits indefinitely, preventing platforms from charging restaurants what bill sponsors considered excessively high commissions.
Delivery platforms request a court order that prevents law enforcement. They want the court to declare the bill unconstitutional and also seek damages from the city.
The lawsuit follows a similar legal action by DoorDash and Grubhub against San Francisco, which also introduced a permanent 15% delivery fee cap.
Representatives of the mayor and the project sponsor did not immediately respond to requests for comment.
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