NEW YORK (Legal Newsline) – New York City is defending its ordinance that restricts food delivery apps from charging restaurants more than 15% and customers more than 5% for “other” fees.
The city on March 7 filed a motion to dismiss a federal lawsuit challenging the measure, which was enacted in May 2020. The plaintiffs are DoorDash, GrubHub and Portier.
The plaintiffs say the price controls harm the restaurant industry as it rebounds from the COVID-19 pandemic. The law was set to expire after 90 days but has been extended.
New York City says the ordinance does not “substantially” impair the apps’ contracts with restaurants and that it had a legitimate public interest in passing it.
“During the COVID-19 pandemic, the impact of excessively high commissions became even more severe,” the motion says, claiming profits for the food-delivery services increased under the cap.
“With knowledge that fee caps would not have a detrimental effect on TPPs, it was reasonable for the City Council to modify and permanently implement the same commission caps to ensure the survival of restaurants, which are crucial to the economic and social vitality of the city as cornerstones of communities and employers of over 300,000 New Yorkers.”
NYC calls the ordinance an appropriate exercise of its police power.