Food-delivery companies sue NYC over commission caps

Food-delivery companies sue NYC over commission caps
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Three major food-delivery companies are suing New York City over caps on how much the companies can charge local restaurants to use their services.

The lawsuit filed on Thursday by DoorDash, GrubHub and Uber Eats asks a federal judge to impose an injunction on the permanent 15 percent commission cap the city imposed last month. 

The lawsuit says the commission cap is unconstitutional, is harmful to customers who will have to bear the cost of the restriction and is unnecessary.

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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 complaint states. 

“Furthermore, if the City’s goal is to improve the profitability of local restaurants, then the City—which projected a budget surplus for Fiscal Year 2021 of $3.4 billion—has other, lawful means to aid restaurants, such as tax breaks or grants. But rather than exercise one of those lawful options, the City chose instead to adopt an irrational law, driven by naked animosity towards third-party platforms and unlawful economic protectionism,” the complaint adds.

A GrubHub spokesperson said in a statement the company has worked to support local restaurants during the pandemic, but the city’s measures will lead to fewer orders for both restaurants and food-delivery services. 

New York City Council passed harmful, unnecessary, and unconstitutional price controls which leave us no choice but to resolve this matter in court, as we did in San Francisco. Not only do price controls violate the U.S. and New York Constitutions, but they will likely harm the very restaurants the City purports to support,” a DoorDash spokesperson said about the complaint. 

The Hill has reached out to NYC officials and Uber Eats for comment.