DoorDash, Grubhub, Uber Eats Sue the City of New York Over Fee Caps

In May 2020, in response to the coronavirus pandemic, the city of New York first enacted a price cap, limiting the rate that third-party platforms could charge restaurants at 15% of an online order for delivery services, and 5% for all other services, including marketing.

Last month, New York City Council passed a handful of bills it said would help small restaurants, like prohibiting some third-party delivery service charges and mandating that their phone numbers are listed on those delivery sites.

Now, all three delivery companies are suing the city of New York over fee caps claiming, they were “instrumental in keeping restaurants afloat and food industry workers employed” after investing millions of dollars in relief for those businesses.

During the pandemic, food delivery services including Grubhub, DoorDash and Uber Eats, experienced tremendous growth. These companies are constantly clashing with their local governments who claim restaurants and consumers are getting hit with exorbitant fees and high costs.

Last month Chicago officials accused DoorDash and Grubhub of harming the city’s restaurants and their customers by charging high fees and through other deceptive practices.

an Francisco’s district attorney has accused delivery companies of violating California law by classifying drivers as contractors.

Washington, D.C., reached a settlement with DoorDash in 2019 after alleging the company misled customers about how much drivers received in tips.

The Massachusetts attorney general’s office in July filed a lawsuit accusing Grubhub of charging restaurants illegally high fees during the pandemic.

Grubhub, DoorDash, and Uber Eats are filing for an injunction that would prevent the city from enforcing an extension on the fee caps adopted in August.

The companies are seeking unspecified monetary damages as well as a jury trial.