DoorDash Continues NYC Legal Battle Over Data

DoorDash has filed a federal lawsuit against New York City, arguing that its law that mandates food delivery services to share consumer data with restaurants violates privacy and gives restaurants an unfair advantage.

As Reuters reported on Wednesday, September 15, the lawsuit comes six days after DoorDash, Grubhub, and Uber Eats sued the city over a different law, which caps the fees that delivery companies charge to eateries.

“The law puts consumers first,” Nicholas Paolucci, spokesman for the city law department, told Reuters. “It puts them in control of their information when they place orders through these apps.”

Since the COVID pandemic began, New York has taken steps to help restaurants that needed delivery services to offset the loss of in-person dining, but chafed at having to pay app fees as high as 30%.

In May of 2020, New York instituted a cap on those fees with a measure that limits food delivery commissions at 15% for delivery services, 5% for add-ons such as marketing and 3% for transaction fees. That legislation became permanent earlier this year. The companies say the caps cost them hundreds of millions of dollars of revenue through July.

In the latest lawsuit, DoorDash stated New York showed “naked animus” by requiring food delivery companies to turn over customers’ names, phone numbers, email addresses, and addresses to restaurants, per Reuters.

The delivery app stated this move lets restaurants “free-ride” on data they would never request from in-person diners, in a “shocking and invasive intrusion of consumers’ privacy.” In addition, the data could put “more vulnerable populations” at risk if it were mishandled or shared with immigration officials or hate groups, the company claimed.