On Wednesday, September 15, 2021, DoorDash filed a lawsuit against New York City in the U.S. District Court, Southern District of New York, concerning a law that requires delivery companies to share customer data with restaurants. The law, set to take effect in December, requires companies like DoorDash to provide restaurants fulfilling orders with customer names, phone numbers, email addresses, and delivery addresses. Customers may opt out of sharing this data.
Doordash argues that the law is unconstitutional and undermines the privacy of New York City’s residents. The delivery company claims that the law is virtually unrestricted as to what restaurants may do with customer data and that the law provides no guidelines as to data security. Further, Doordash asserts that restaurants will use the company’s trade secrets to compete directly with DoorDash, forcing DoorDash to modify its services. The company claims that this modification of services would result in fewer resources offered to restaurants, fewer earnings opportunities for delivery couriers, and fewer choices for customers. DoorDash also alleges that the law is unconstitutional because it interferes with privately negotiated contracts between platforms and restaurants by altering the economic terms on which the industry operates.
This latest lawsuit is the third lawsuit in a string of recent lawsuits filed by food delivery companies. DoorDash and Grubhub sued San Francisco in July over a permanent 15% fee cap on app-based delivery orders. Just last week, DoorDash, Uber Eats, and Grubhub sued New York City over a similar permanent fee cap limiting the amount the companies can charge restaurants. New York City’s permanent fee cap comes after a temporary cap was put in place during the COVID-19 pandemic.
Additional Reading
DoorDash sues New York City over new data sharing law, CNBC (September 15, 2021)
Uber Eats, DoorDash, Grubhub sue New York City over legislation on commission caps, Reuters (September 9, 2021)
DoorDash, Inc. et al v. City Of New York (Permanent fee cap lawsuit)
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