Grubhub, Uber Eats, Doordash

Uber Eats, DoorDash and Grubhub slap NYC with a lawsuit over restaurant fee cap

Grubhub, Uber Eats, Doordash
Source: Restaurant Business Online

Uber Eats, Grubhub and DoorDash have reportedly sued New York City for making pandemic-induced fee capping permanent. Something that was meant to help restaurant owners during the time of crisis has been made permanent in New York and food delivery services are going into losses.

The city imposed capping on delivery fees that these services were charging restaurant owners for delivering orders from the restaurant to the customer’s doorstep. These delivery costs charge which the restaurant owners are meant to pay but due to the COVID-19 pandemic, there was zero dining in these restaurants and the owners could not afford to pay for these delivery services. So, in order to help these restaurant owners and keep food deliveries safe and fast, New York City imposed fee limits on these services, temporarily, of course, to save restaurant businesses and prevent them from shutting down.

We all know the situation during the peak pandemic months, there was barely anyone on the streets of New York City or any other place with a high number of cases. So, New York City officials decided to help these restaurant owners but recently in the month of August, officials made these changes permanent, and it does not sound good for food delivery businesses.

As mentioned in a report by Engadget, food delivery services charge restaurants about 23 percent which is also inclusive of 3 percent credit card processing fees. The report explicitly mentions that if not this, these food delivery services could charge up to 35 percent fees per order.

The food delivery services- Uber Eats, Door Dash and Grubhub have filed a case in the United States District Court which cites the reason, that the limit is unconstitutional and tantamount to government overreach which will eventually damage the business, as noted by Engadget and first reported by The Verge.

New York City will agree that these food delivery services have served the city during the pandemic crisis and this price control constituted by the government is said to be unconstitutional that is specifically targeting the food delivery industry. This price control will eventually increase food prices for customers which will then lead to lesser orders, impacting both the restaurants and food delivery services.

In my opinion, which resonates with hundreds and thousands of people, New York City should not have made the fee caps permanent.

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