Food delivery app sues New York beyond price limits

The three largest food delivery platforms have filed proceedings in an attempt to overturn the New York City limit on the charges that can be charged to restaurants.

The proceedings filed by Grubhub, DoorDash, and Uber Eats in the Federal District Court in Manhattan on Thursday were the latest confrontation in overtime, which began nearly two years before the city council first discussed potential caps.

The council held a hearing complaining about restaurant owners paying as much as 30%. No order was placed..

No action was taken until the coronavirus struck New York, and many restaurants in the city closed their canteens, making delivery the only option for survival.City council saying that they want to send a lifeline to a restaurant Temporarily limit the charge The food delivery app may charge 15% for online orders and 5% per order for other charges such as marketing.

In August, the city council resolved to make the cap permanent, eliciting opposition from the app platform that led to the proceedings, and seeking an injunction to remove the cap until a trial is held.

“This indefinite law has nothing to do with public health emergencies, it’s just an unconstitutional, harmful and unnecessary government overkill to be withdrawn,” the two companies said in a proceeding.

The two companies accused the city’s law of “interfering with freely negotiated contracts” between apps and restaurants by “changing and dictating economic conditions” in the industry, calling it “unconstitutional” behavior and ultimately. Will lead to higher consumer prices and less profit for restaurants.

“Price controls increase shipping charges to consumers, which leads to fewer orders for both restaurants and courier services,” said Katie Norris, director of corporate communications at Grubhub, in a statement. “Grubhub is ready to continue to be involved in the city council, but unfortunately it has no choice but to take legal action.”

In a statement, Mark Jonai, chairman of the Council’s Small Business Committee and sponsor of the bill, said the law “brings fairness to systems that often lack it.” He said he was aiming.

Kate Lucadamo, a spokeswoman for the city council, said the body would fight the proceedings.

“Restaurant is not only an important part of New York City’s economy, but also part of our culture and way of life,” said Lucadamo. “The council was unable to allow third-party distribution apps to continue without checking for predatory practices.”

The proceedings were caused by a surge in the use of third-party distribution apps during the pandemic, but there are also increasing efforts to regulate the apps.

San Francisco voted to make the 15% cap on the price permanent, but mayor of London Breed Rejected signature, States that the permanent cap “exceeds what is needed for the public good.”Chicago recently sued a food delivery app to charge restaurants and customers Engage in high fees and deceptive practices..

The argument from the food delivery app is that restaurants don’t have to sign contracts with them. The city council does not regulate charges from other marketers that restaurants may use, such as Google, Yelp, and online booking apps. The fee caps selected by the city council are also arbitrary and are not supported by economic impact research, legal costs.

Grubhub, DoorDash, and Uber Eats claim that third-party distribution apps give restaurants a huge customer base that they have spent millions of dollars cultivating.

Andrew Lizzie, Executive Director of the New York City Hospitality Alliance, called the three companies’ claims dishonest. Many restaurant owners feel they have no choice but to register for one of the third-party delivery app platforms or be left behind in a highly competitive market where customers have become dependent on the app for food delivery.

Some third-party shipping companies place menus for non-contracted restaurants in the app, Purchasing an internet domain name For restaurants.

“This is all part of a very sophisticated approach that Birondoll companies use to redirect consumer purchases through channels and control the market,” says Rigie. “Restaurant feels that it can’t afford to join the platform, but it can’t afford not to join the platform.”

Companies like Grubhub have begun to face investor scrutiny on some of these practices, Fixed them.. However, these changes were not enough for the city council. The city council will vote for a legislative package that regulates the way food delivery services are delivered later this month. Treat their workers..

A bill with strong support from members of the council will require the app to allow their workers to set route options and distance limits. Initiate a survey of working conditions that establishes a minimum payment per worker’s trip. Require restaurants and apps to disclose tip policies. Request the restaurant to provide delivery personnel with access to the bathroom.

“During the pandemic, we learned that this was an essential workforce,” said Carlos Menchaka, a Brooklyn councilor and one of the legal sponsors of the law that establishes wage standards for delivery workers. rice field. “We’re not going to stop because they don’t stop at their incredible mining of money and profits.”

Food delivery app sues New York beyond price limits

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