Food-delivery apps sue New York City over fee caps
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NEW YORK • New York City's three largest food-delivery platforms have filed a lawsuit seeking to overturn the cap on how much they can charge in fees from restaurants.
The lawsuit, filed by Grubhub, DoorDash and Uber Eats in the US District Court in Manhattan on Thursday, was the latest confrontation in an extended battle that began nearly two years ago, when the City Council first discussed a possible cap.
The council held hearings during which restaurant owners complained of paying fees as high as 30 per cent, saying that fees were levied even on calls that did not result in orders.
No action was taken until the coronavirus struck New York, forcing many restaurants across the city to close their dining rooms and making delivery the only option for survival.
Saying that it wanted to send restaurants a lifeline, the City Council temporarily capped the fees that food-delivery apps could charge, setting them at 15 per cent for online orders and 5 per cent per order for other fees such as marketing. In August, the City Council voted to make the caps permanent, drawing opposition from the app platforms that led to the lawsuit, which also seeks an injunction to remove the caps until a trial can be held.
"This now-indefinite legislation bears no relationship to any public health emergency, and qualifies as nothing more than unconstitutional, harmful and unnecessary government overreach that should be struck down," the companies said in their lawsuit.
Mr Mark Gjonaj, chair of the council's small-business committee and a sponsor of the legislation, said in a statement that the law sought to "bring fairness to a system that all too often lacks it".
Ms Kate Lucadamo, a spokesman for the City Council, said it would fight the lawsuit. "Restaurants are not just a critical part of New York City's economy, they are part of our culture and our way of living. The council could not allow third-party delivery apps to continue their predatory practices unchecked."
The lawsuit comes as third-party delivery-app usage has soared during the pandemic, even as efforts to regulate the apps have also increased.
NYTIMES
