(WSJ) Uber Technologies, DoorDash Inc., and Grubhub Inc. have filed a lawsuit in a New York federal court to protest a fee cap by the city authorities.
The food-delivery firms say the fee cap constitutes government overreach and is harmful. They say it has cost the companies hundreds of millions of dollars through July.
The firms say a permanent cap will prompt them to rewrite their contracts with restaurants, cut marketing in the city, and raise consumer fees.
The firms want an injunction, preventing the New York city authorities from enforcing the cap, which was adopted last month. They also demand unspecified monetary damages and jury trial.
The delivery entities say they want to show the illegitimacy of the limits, terming them unconstitutional that violate the negotiated contracts and sets a dangerous precedent.
New York City’s chairman of the Small Business Committee says its council wants to move forward with the fee caps, in a move that is likely to escalate tensions with the regulator.
The delivery apps charge commissions of up to 30% per order on restaurants. New law put a cap of about 23% per order, 15% for delivery, 5% and 3% for listing on apps and credit-card processing, respectively.
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