DoorDash and Grubhub sue San Francisco over 15% cap on delivery charges

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Grubhub and DoorDash have launched a lawsuit against San Francisco over its 15% delivery fee cap rule that was made permanent last month.

The two meal delivery companies filed a lawsuit with the U.S. District Court for the Northern District of California on Friday in which they argue that the capped fees violate the U.S. and California constitutions. Court documents show that DoorDash and Grubhub argued that the cap could potentially result in higher prices for consumers and affect delivery couriers, among others.

“The city of San Francisco has passed hasty, damaging and unconstitutional price controls that leave us with no choice but to resolve this matter in court,” a DoorDash spokesperson said in a statement shared with SFGATE. “The permanent price controls not only violate the US and California constitutions, but they’re likely to hurt the very restaurants the city claims to support. The imposition of permanent price controls is an unprecedented and dangerous overshoot on the part of the government and will limit the options on which small businesses can rely to compete in an increasingly competitive market.



Delivery companies also said business could be affected by the 15% cap fee, as it would lead to the renegotiation or termination of existing contracts with local restaurants. Part of their reasoning was based on marketing and other services. DoorDash and Grubhub say they couldn’t afford to cover the costs.

Supervisor Aaron Peskin, who co-sponsored the bill in June, denounced the two food delivery companies on Friday in a tweet following the complaint. He wrote that he was not surprised by the trial.

“Not really surprising from the big companies who just spent over $ 200 million to take away basic benefits from their own workers,” Peskin wrote on Twitter. “I strongly support small businesses and my legislation to end the rampant exploitation of the San Francisco restaurant industry. “

Last April, the Mayor of London Breed announced a temporary fee cap to prevent food delivery apps from charging restaurants more than 15% to help local businesses stay afloat during the coronavirus pandemic. At the time, the temporary order would remain in effect until the remainder of the local emergency or until restaurants can reopen for food service.

Court documents argue that the local emergency has been “eased” with the advent of vaccinations. A summons to appear in court was issued in San Francisco on Monday.




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