DoorDash, Grubhub, and Uber Eats Settle NYC Lawsuit Over Delivery Fee Caps

DoorDash, Grubhub, and Uber Eats have settled a lawsuit with New York City concerning the city's permanent cap on delivery fees, marking a significant development for the U.S. food delivery sector.

Background: Why the Lawsuit Happened

• In May 2020, at the height of the COVID-19 pandemic, New York City enacted a temporary cap on delivery charges:

  • 15% for food delivery

  • 5% for marketing and other services

• These measures aimed to protect struggling restaurants from what were often 30%+ commission fees, citing the risk of "social and economic devastation".

• When the cap became permanent in August 2021, the delivery platforms sued, claiming the law:

  • Violated their constitutional right to contract

  • Forced them to operate at a loss

  • Resulted in hundreds of millions in lost revenue

Terms of the Settlement

• Filed in Manhattan federal court, the settlement:

  • Allows occasional higher charges than the current cap

  • Requires New York City Council to enact proposed changes

  • Results in the lawsuit being dismissed with prejudice, meaning it can't be filed again

• This resolution ends a nearly three-year legal battle, though final terms hinge on City Council approval.

Implications for the Food Delivery Market

• Restaurant operators could face higher service fees again, potentially impacting pricing for consumers.

• Delivery companies may regain operational flexibility in one of their biggest urban markets.

• The deal could set a national precedent for how municipalities regulate food delivery commissions post-pandemic.

Investor Angle

For investors tracking the evolving dynamics in food tech and gig economy platforms:

• Analyze company-level revenue exposure using the Full Financial as Reported API

• Track performance impact across peer companies using the Ratios (TTM) API

Bottom Line

This lawsuit settlement marks a turning point in platform-city relations. As regulatory frameworks adapt to post-pandemic realities, platforms like DoorDash, Uber Eats, and Grubhub are now better positioned to renegotiate their economic models—and New York City may become the blueprint for similar reforms nationwide.