New York City was ordered to face a lawsuit by DoorDash Inc., Grubhub Inc. and Uber Technologies Inc.’s Uber Eats over a pandemic-era cap on how much the meal-delivery services can collect from local restaurants, moving the case closer to a possible trial.
The companies properly laid out claims that the 15% cap is intended to discriminate against California companies in favor of “mom and pop” New York shops, US District Judge Gregory Woods ruled Tuesday in Manhattan.
Food delivery companies sued in 2021, arguing that the law interferes with their right to freely negotiate contracts and that the cap will likely result in higher prices for consumers and lower earnings for restaurants and drivers. When the law was being debated at a July 2021 hearing at the city council’s Committee on Small Businesses, one council member said the cap was needed to help “mom and pop shops” use services from “venture capital-backed Silicon Valley tech behemoths.”According to the delivery firms, discrimination against out-of-state companies violates the federal Commerce Clause of the US Constitution, which limits the ability of local governments to restrict interstate trade.
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