Proponents of making the fee caps permanent have said that they are critical to ensuring the survival of the city’s restaurants, which have been hit hard in the pandemic. ![]() ![]() “The initiative is legally sound and we’ll defend it in court,” the city’s law department told CNN Business in response to a request for comment on the suit. “Left unchecked, the Ordinance sets a dangerous precedent,” they wrote in the suit. It would also likely mean raising fees for people who order delivery, they warned in the lawsuit. “The Ordinance is unconstitutional because, among other things, it interferes with freely negotiated contracts between platforms and restaurants by changing and dictating the economic terms on which a dynamic industry operates,” the lawsuit said.Ī permanent cap likely means that they will have to renegotiate or end contracts with restaurants and scale back some services, the plaintiffs said in the suit. In addition to damages, they are seeking an injunction against the city preventing it from enforcing the rule. The city council voted in late August to make the limitations permanent.ĭoorDash, which owns Caviar Grubhub, owner of Seamless and Portier LLC, the Uber subsidiary that operates Uber Eats and Postmates, filed the lawsuit Thursday in federal court in the Southern District of New York. Under the rules, the platforms can bill restaurants 15% of a given order for delivery, plus an additional 5% for fees other than credit-card fees, like marketing which are tacked on as well. ![]() New York City last year started restricting what third-party platforms can charge for delivery services as a way to help restaurants cope with pandemic restrictions. The companies argue that the restrictions amount to government overreach and ultimately hurt consumers. (CNN) - DoorDash, Grubhub, and Uber Eats are suing New York City over its decision to make pandemic-era caps on the fees they charge restaurants permanent.
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