A couple of weeks ago, the New York City Council passed new legislation which restricted the amount that home delivery services can charge restaurants for using their platforms. Now, Uber Eats and a couple other services have come together to sue the city over these new changes.
According to a new report from Reuters, Uber Eats, GrubHub, and DoorDash have teamed up and filed a lawsuit against New York City as a result of the new legislation. The trio’s federal lawsuit is aimed at preventing the city from setting a cap on the fees businesses can charge restaurants.
“Those permanent price controls will harm not only the Plaintiffs, but also the revitalization of the local restaurants the City claims to serve,” says the lawsuit filed late last week. The lawsuit alleges that the new legislation is unconstitutional, as it “interferes with freely negotiated contracts.”
However, New York City sees it a little differently. The official legislation comes as a result of time limits enacted during COVID closures when many restaurants were about to close completely. The city has now decided to make the 15% commission cap permanent.
Uber Eats, GrubHub, and Doordash have a substantial presence in New York City, so it makes sense for them to band together against this new law that will negatively affect all of their businesses. As of now, it looks like the case will go to federal court, so we’ll have to wait and see how it all plays out.