New York City sues delivery app companies over customer data

New York City - "DoubleDash" decamped on 15 Sept. NEW YORK - February 15 — DoorDash Inc sued New York City over a new law that requires food delivery companies to share customer data with restaurants, saying it violates customer privacy and lets restaurants compete unfairly.

The lawsuit is the latest in a series of legal clashes between food delivery companies and cities.

It was filed in federal court in Manhattan six days after DoorDash, Grubhub Inc and Uber Eats sued the United States' most populous city over a separate law capping fees that delivery companies charge restaurants.

The law puts consumers first, said Nicholas Paolucci, a spokesman for the city's law department, in an email. It puts them in control of their information when they place orders using these apps. New York City has tried since coronavirus pandemic began to help restaurants that had complained about food delivery app fees as high as 30%, but grew more dependent on delivery as the dining rooms closed or limited capacity.

About 90,000 restaurants nationwide closed temporarily or permanently during the pandemic costing 1.5 million jobs, the National Restaurant Association said in June.

In Wednesday's lawsuit, San Francisco-based DoorDash says the city showed naked animus by requiring food delivery app companies to provide customers' names, phone numbers, email addresses and delivery address to restaurants.

DoorDash said this would let restaurants free-ride on data they can't demand from in-person diners, in a shocking intrusion of consumers' privacy. It also said more vulnerable populations, especially undocumented customers, could be harmed if data was shared and mishandled with immigration authorities or hate groups.

Soon after the pandemic began, New York City imposes temporary 5% and 15% fee caps on food delivery services that to companies hoped would end as restaurants resumed more normal operations.

The caps cost Uber, DoorDash, Grubhub and Uber thousands of millions of dollars of revenue through July, the companies said.

DoorDash and Grubhub sued California over charging caps in July. They sued Chicago last month, saying their deceptive practices hurt customers and misled restaurants. Grubhub and DoorDash rejected Chicago's claims.

The case is DoorDash Inc v City of New York, U.S. District Court, Southern District of New York, No.