BY ROBBIE SEQUEIRA
In August, the New York
City Council made the decision
to permanently implement
a pandemic-chartered
rule to limit the fees charged
by third-party delivery services
to 15% for delivery services
and 5% for all other
services, such as marketing,
credit card processing or
other fees.
Third-party companies Door-
Dash, Grubhub, and Uber Eats
are now suing the city in response
to its decision, calling it
“nothing more than unconstitutional,
harmful, and unnecessary
government overreach.”
According to court documents,
the lawsuit, which was
filed Thursday states that NYC’s
permanent installation of the
“arbitrary” cap could shift consumer
behavior, lower order volume,
and create mutual losses for
drivers, companies and the city
by decreasing earnings for drivers,
and cut the city’s tax revenue.
“Left unchecked, the Ordinance
sets a dangerous precedent,”
the court document states.
The lawsuit argues that
costs of delivery and marketing
will shift to consumers.
The companies allege that
NYC elected offi cials did not
solicit or review any data to
understand the long-term impact
of the cap and its potential
consequences.
Third-party delivery services
state that in lieu of the delivery
caps — which went into effect in
September 2020 and was originally
meant as a temporary 90-
day measure — New York City
could’ve used its $3.4 billion budget
surplus as another way to provide
aid to local restaurants.
“But rather than exercise
one of those lawful options,
the City chose instead to adopt
an irrational law, driven by
naked animosity towards
third-party platforms and unlawful
economic protectionism,”
the lawsuit states.
During the pandemic, the
New York City Council placed
a temporary 20% cap on delivery
and non-delivery fees as well
as the commissions that can be
charged by third-party platforms
from phone order fees for calls
that did not result in a completed
order.
BRONX TIMES REPORTER,14 SEPT. 17-23, 2021 BTR
Those temporary measures
were set to expire on Aug. 17.
The legislation was a part of
a series of legislative items cosponsored
by councilmen Mark
Gjonaj, a Democrat representing
the Bronx’s 13th District, and
Democrat Francisco Moya, who
represents Queens’ 21st District.
In a statement to the Bronx
Times, Gjonaj stood by his legislation
and championed the
cap as a way to level the playing
fi eld for NYC restaurants
and establishments, and the
third-party delivery service
giants.
“It has come to my attention
that DoorDash, Uber and
Grubhub have recently fi led
a lawsuit against the permanent
commission cap law instituted
by New York City in
a misguided effort to protect
what they feel is their right to
fl eece local mom-and-pop eateries
On Sept. 9, 2021, third-party delivery services fi led a lawsuit against the
New York City Council challenging an August decision to permanently
cap fees charged by those delivery services. Photo Reuters
out of every dime that
they can squeeze from them,”
he said. “It’s unfortunate but
not surprising.”
Gjonaj added that the New
York City Council will continue
to explore additional reforms to
the third-party service that act
in the interest of the city’s momand
pop eateries.
Andrew Rigie, executive
director of the NYC Hospitality
Alliance, who has been
highly critical of the third parties
throughout the pandemic,
said the lawsuit is a “last-ditch
effort” to overturn widely supported
legislation and to continue
“preying on New York
City restaurants.”
Third-party delivery
giants sue NYC over cap