DoorDash sues New York City over new data-sharing law
A DoorDash sign is pictured on a restaurant on the day they hold their IPO in New York, December 9, 2020.
Reuters filed a lawsuit Wednesday against New York City over a new law that requires delivery companies to share more customer data with their restaurants.| Reuters
DoorDash filed a lawsuit Wednesday against New York City over a new law that requires delivery companies to share more customer data with their restaurants.
The City Council approved a bill earlier this summer that delivery companies have to provide customer data, such as names, phone numbers, emails and delivery addresses, to restaurants that fulfill the order, unless a customer opts out.
This law will take effect December 1.
DoorDash has disavowed and criticized the bill as unconstitutional, undermining New York City citizens’ privacy rights and a violation of New York City law. According to the company, there is no restriction on how restaurants can use that data or guidelines for data security.
DoorDash stated in its complaint that “in an era where there are heightened concerns over data privacy and identity theft this compelled disclosure represents a shockingly invasive intrusion into consumers’ privacy.”
DoorDash also claimed that DoorDash’s trade secrets will allow restaurants to directly compete with the company. The suit stated that the suit would require the company to alter its services to make it less attractive to New York City restaurants and offer them fewer earning opportunities as delivery couriers. This will leave New York City with fewer options.
Some restaurants have called for app-based delivery companies, like DoorDash, Grubhub and Uber Eats, to share more customer data so their reliance isn’t as strong on the platforms. Customers could be marketed directly by restaurants and not feel tied to using the service.
The law places consumers first. They are in charge of the information they provide when placing orders via these apps,” Nick Paolucci (New York City’s director for public affairs, and press secretary) said in an email.
The suit filed by Wednesday is only the latest complaint between regulators and food delivery services. Last week, DoorDash, Grubhub and Uber Eats filed a lawsuit against New York City over a bill that would make emergency delivery fee caps installed during the Covid pandemic permanent.
According to the companies, the law was unconstitutional as it “interferes with freely negotiated agreements between platforms and restaurants and changes and dictates the economic terms upon which a dynamic sector operates.”
Similarly, DoorDash and Grubhub are suing San Francisco, which also introduced a permanent 15% delivery fee cap.