DoorDash has launched a lawsuit against New York City due to a new law the city has passed, which requires delivery platforms to share customer data with restaurants. This lawsuit is the latest in a series of legal squabbles between delivery platforms and local government.
Last week, DoorDash, Grubhub and Uber Eats filed a lawsuit against New York for passing legislation that placed a permanent cap on the fees that delivery companies can charge restaurants. In August, Chicago filed a lawsuit against Grubhub and DoorDash for using misleading business tactics that hurt restaurants, delivery workers and consumers during COVID-19. In July, both DoorDash and Grubhub filed a lawsuit against San Francisco over fee caps implemented there.
The law, which was passed in July, requires third-party delivery platforms to provide customers’ full names, phone numbers, emails, and delivery addresses with restaurants that complete orders. Platform users can opt out, but have to do it each time they complete an order.
In DoorDash’s complaint, it argues that its users trust DoorDash with their personal information, “that they would not entrust to small businesses that do not have similar robust data safety and security protocol.”
DoorDash also added to its complaint that “in an era of heightened concerns about data privacy and identity theft, this compelled disclosure is a shocking and invasive intrusion of consumers’ privacy.”
Both restaurants and delivery platforms want primary access to this data since it’s marketing gold. This bill helps to ensure that restaurants will not lose customers that choose to stop using delivery platform apps. It also evens the playing field between restaurants and platforms in giving restaurants a chance to market directly to customers.
The National Restaurant Association reported that about 100,000 U.S. restaurants have closed permanently or long-term due to COVID-19. In comparison, delivery giants had big sales gains since more Americans opted to order in. Uber was able to post profits for the first time ever since digital food orders through Uber Eats skyrocketed during the pandemic.
For now, the law is set to start in December, but DoorDash is seeking an injunction against the new law in addition to damages.