DoorDash IncGrubhub Inc. and Uber Eats are suing New York City over its law capping its fees for their services for good, according to a report by The Wall Street Journal on Friday.
- The three largest food delivery companies filed the suit in the federal court in New York late Thursday, challenging that the fee cap is harmful and amounts to government overreach.
- The limit on fees has cost the companies hundreds of millions of dollars through July. A permanent cap will require them to rewrite contracts with restaurants, reduce marketing in the city and raise fees for consumers.
- The companies are seeking an injunction to prevent New York from enforcing the fee-cap ordinance set last month, unspecified monetary damages, and a jury trial.
The food delivery companies are suing New York at a time of heightened scrutiny from local regulators across the U.S. after the COVID-19 pandemic pushed consumer shift to the platforms. UBER up +0.70%, DASH up +3.39%, GRUB up +1.43% Pre-market trading