NEW YORK (Legal Newsline) - Food delivery companies are suing New York City over price controls on orders.
DoorDash, Inc., GrubHub Inc., and Portier, LLC., filed a federal complaint on September 9 in the Southern District of New York against the City of New York, alleging violations of the U.S. Constitution and many other laws.
According to the complaint, the City of New York has imposed permanent price controls on a private and highly competitive industry — the facilitation of food ordering and delivery through third-party platforms. Those permanent price controls will harm not only Plaintiffs but also the revitalization of the very local restaurants that the City claims to serve, the suit claims.
In May 2020, purportedly in response to the COVID-19 pandemic, the City enacted unconstitutional price controls that impaired existing agreements and prevented restaurants and third-party platforms from freely negotiating the prices that platforms may charge restaurants for their services within the City, primarily by capping the rate that third-party platforms could charge restaurants at 15% of an online order for delivery services and 5% for all other services, including marketing, the suit says.
The law, which was set to expire after 90 days, was extended until February 17, 2022.
DoorDash, Inc., GrubHub Inc., and Portier, LLC are represented by Anne Champion and Joshua S. Lipshutz.
U.S. District Court Southern District of New York case number 1:21-cv-07564