DoorDash, Caviar, Grubhub, Seamless, Postmates, and Uber Eats are usually competitors, but they’re pals when it comes to suing NYC over a law meant to help restaurateurs.
In May 2020, New York City Council passed several measures to help restaurants struggling amid the pandemic.
Among them was a temporary cap on 3rd-party app fees.
The new rule:
- Apps could charge no more than 15% on delivery orders and no more than 5% on marketing or other fees
- Violators could face up to $1k in fines per day, per restaurant
But in August, NYC voted to make its cap permanent
The apps argue that the cap is “unconstitutional,” while Grubhub claims it only made 1% of total food sales as profit before the cap and 0% now.
City Council says the cap protects restaurants against “predatory” practices.
But wait, there’s more:
- Grubhub and DoorDash are also suing San Francisco over its decision to make a 15% delivery cap permanent.
- The city of Chicago is suing Grubhub and DoorDash, accusing the platforms of deceiving customers, drivers, and restaurants.
- Last year, DoorDash agreed to pay $2.5m to settle a DC suit alleging that it misled customers about how much of their tips went to drivers.
So, what’s a diner to do? Experts say the best way to support your local faves is to order from them directly.
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