Why delivery apps and cities are suing each other
The Hustle

Why delivery apps and cities are suing each other

Cities and food delivery apps are fighting over caps on the fees restaurants pay to use them.

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.

The backstory:

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:

As restaurants complained that the ~30% fees were too much at a time when customers were only getting takeout or delivery, cities including Los Angeles, DC, and Philadelphia passed similar measures.

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:

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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