The three food-delivery companies filed a
lawsuit in federal court in New York late on Thursday. The companies are
seeking an injunction that would prevent New York from enforcing the fee-cap
ordinance adopted last month, as well as unspecified monetary damages and a
jury trial.
The New York City Council approved in August
legislation that limits the amount that food-delivery companies can charge
restaurants to use their platforms and requires them to obtain operating
licenses that are valid for two years.
"Those permanent price controls will harm
not only Plaintiffs, but also the revitalization of the very local restaurants
that the City claims to serve," the companies said in the lawsuit filed on
Thursday.
The suit argues that the legislation is
unconstitutional because "it interferes with freely negotiated contracts
between platforms and restaurants by changing and dictating the economic terms
on which a dynamic industry operates".
The legislation comes after the city enacted
temporary caps on the commissions food delivery companies charged restaurants
during the pandemic, when so many of them were forced to close or rely on
delivery and carry-out alone.
It seeks to limit the amount those companies
can charge restaurants to 15% of food orders for delivery services and 5% for
advertising and other non-delivery services.
The New York City restaurant delivery market
is split almost evenly among the major platforms, according to Bloomberg Second
Measure, which collects payment data from customers.
DoorDash commanded 36% of July sales in the
city, Grubhub 34% and Uber Eats and Postmates a joint 30%.
San Francisco has also enacted permanent
commission caps on the services.
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