DoorDash, GrubHub, Uber Sue NYC - What You Need To Know

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  • DoorDash Inc DASHGrubHub Inc GRUB, and  Uber Technologies UBER Eats have sued New York city for installing permanent fee caps on emergency delivery during the pandemic, CNBC reports.
  • The companies alleged the City Council's cap of 23%, which translated into a 15% fee cap for delivery and 5% for app listing, and 3% for credit-card processing fees, had cost them hundreds of millions of dollars, the Wall Street Journal reports.
  • The cap implied that GrubHub's commission would be limited to 8%. Previously the apps could charge restaurants commissions up to 30% per order.
  • A permanent cap will force the companies to revise contracts with restaurants, reduce marketing and raise fees for consumers, alleged the trio.
  • The restaurants were free to ditch their services if the prices bit them added the companies.
  • The suit alleged that competitors like Alphabet Inc GOOG GOOGL and Yelp Inc's YELP have been exempt from the capping.
  • The companies sought an injunction to prevent the law from being enforced, rendering the bill unconstitutional and seeking damages from the city.
  • DoorDash commanded 36% of July sales in the city, GrubHub 34%, and Uber Eats and Postmates a joint 30%, as per a Reuters report.
  • DoorDash and GrubHub filed a similar lawsuit against San Francisco for fixing a permanent 15% delivery fee cap.
  • Price Action: UBER shares traded lower by 0.63% at $40.10 on the last check Friday.
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Posted In: GovernmentNewsRegulationsSmall CapLegalTechMediaBriefs
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