On Wednesday, DoorDash sued New York City for a new law requiring food delivery companies to share customer data with restaurants, claiming it violated customer privacy and allowed restaurants to compete unfairly.
The lawsuit is the latest in a series of legal conflicts between the food delivery app company and the city.
Six days after DoorDash, Grubhub and Uber Eats sued the most populous city in the United States, it filed a lawsuit in Manhattan federal court on the grounds that a separate law limits the fees that delivery companies charge restaurants.
“The law puts consumers first,” Nicholas Paolucci, a spokesman for the city’s legal department, said in an email. “When they place orders through these apps, they can control their information.”
Since the coronavirus pandemic, New York City has been trying to help restaurants that complain about up to 30% of the cost of food delivery apps, but as restaurants close or have limited capacity, these restaurants have become more dependent on food delivery.
The National Restaurant Association stated in June that during the pandemic, approximately 90,000 restaurants across the country were temporarily or permanently closed, and 1.5 million jobs were lost.
In Wednesday’s lawsuit, San Francisco-based DoorDash stated that the city’s request for food delivery application companies to provide customers’ names, phone numbers, e-mail addresses, and restaurants’ delivery addresses was “blatant hostility.”
DoorDash said this would allow restaurants to “free ride” to obtain data they would not require from face-to-face diners, thus “shockingly and intrusively invading consumers’ privacy.”
It also stated that if the data is improperly processed and shared with immigration authorities or hate groups, “more vulnerable groups, especially undocumented customers” may be harmed.
Soon after the pandemic began, New York City imposed temporary cost caps of 5% and 15% for food delivery apps, and the two companies hope to end as restaurants resume more normal operations.
The two companies said these caps cost DoorDash, Grubhub and Uber Eats hundreds of millions of dollars in revenue before July.
DoorDash and Grubhub filed a lawsuit against San Francisco’s fee cap in July. Chicago sued these companies last month, claiming that their deception misled customers and hurt restaurants. DoorDash and Grubhub rejected Chicago’s argument.
The case is DoorDash Inc v. New York City, United States District Court, Southern District of New York, No. 21-07695.
© Thomson Reuters 2021