Grubhub, DoorDash, and Uber Eats decided to sue the city of New York for putting a cap on the prices they can charge restaurants. The complaint says that the fee caps could harm the business of food-delivery apps. The capping rules were made permanent back in August.
Apps can’t charge more than 23% per order. According to The Verge, the percentages are 15 percent for delivery, 5% for listing restaurants on available platforms, and 3% for credit card processing fees.
The companies have decided to fight the new capping rules, inspired by a similar situation in San Francisco. A matching cap was set in this city earlier this year, prompting pushback from DoorDash. In July, that app and Grubhub filed a lawsuit against San Francisco, and Mayor London Breed decided not to sign the law.
NYC Councilman Mark Gjonaj, a chairman of the small business committee, spoke to the Wall Street Journal. He emphasized that laws were introduced to bring fairness to the system that often lacks it.
A Grubhub spokesman said that the services had worked very hard during the last year or so, trying to support restaurants across the county and New York City. The fee cap would result in the reduction of orders for both couriers and restaurants.
The lawyers share a similar view, pointing out that the regulation is unconstitutional, harmful, and unnecessary.