Uber Eats, DoorDash, Grubhub sue New York City over legislation on commission caps

The three food-delivery corporations filed a lawsuit in federal court docket in New York late on Thursday. The businesses are in search of an injunction that may stop New York from implementing the fee-cap ordinance adopted final month, in addition to unspecified financial damages and a jury trial.

The New York Metropolis Council accepted in August a laws which limits the quantity that food-delivery corporations can cost eating places to make use of their platforms and requires them to acquire working licenses which are legitimate for 2 years.

“These everlasting worth controls will hurt not solely Plaintiffs, but additionally the revitalization of the very native eating places that the Metropolis claims to serve,” the businesses mentioned within the lawsuit filed on Thursday.

The go well with argues that the laws is unconstitutional as a result of “it interferes with freely negotiated contracts between platforms and eating places by altering and dictating the financial phrases on which a dynamic business operates”.

The laws comes after town enacted short-term caps on the commissions meals supply corporations charged eating places through the pandemic, when so a lot of them had been compelled to shut or depend on supply and carry-out alone.

It seeks to restrict the quantity these corporations can cost eating places to fifteen% of meals orders for supply companies and 5% for promoting and different non-delivery companies.

The New York Metropolis restaurant supply market is cut up nearly evenly among the many main platforms, in response to Bloomberg Second Measure, which collects fee information from clients.

DoorDash commanded 36% of July gross sales within the metropolis, Grubhub 34% and Uber Eats and Postmates a joint 30%.

San Francisco has additionally enacted everlasting commission caps on the companies.