This week, District Judge Gregory Woods in Manhattan said that DoorDash, Uber Eats, and Grubhub can sue New York City over a law calling how much they can charge restaurants to deliver their meals.
He added that the three companies sufficiently alleged that the law in question violates the national Constitution and New York state constitution by depriving them of their right to contract and forcing them to operate at a loss.
He added that the companies credibly alleged that the city’s “not-so-veiled” intent in capping commissions at 15% for orders and 5% for advertising and other services was “economic protectionism for local ‘mom and pop’ stores and antagonism toward out-of-state, wealthy third-party platforms.”
The city enacted the caps in May 2020 as a pandemic-related measure to help a restaurant industry beset by closures and upset with paying fees upwards of 30%. The purpose, according to the city, was to prevent “social and economic devastation” that could result if excessive commissions forced restaurant owners to slash employment
The caps became permanent in August 2021, and the lawsuit seeking to overturn them was filed the next month, also seeking damages.