On Thursday, Grubhub, DoorDash, and UberEats announced a lawsuit challenging New York City’s recently enacted permanent fee cap on delivery services. The fee cap limits the ability of delivery services to share the cost of delivery with restaurants, leaving consumers, drivers and delivery apps with the tab. For more on the damaging impact of delivery fee caps, check out the New York Daily News op-ed by Chamber of Progress Founder and CEO Adam Kovacevich.
“New York essentially forced DoorDash, Grubhub, and Uber Eats to raise delivery prices on families when they capped restaurants’ contribution to delivery costs,” said Kovacevich. “Any New Yorker who gets food delivered should cheer this lawsuit.”
On a typical food order of $24, it costs an additional $13 to pay for drivers, management of driver networks, background checks, and credit card processing fees. With commission caps that limit the ability of apps to share these costs with restaurants, much of the expense is passed on to consumers. Those higher prices then create a domino effect, lowering demand from diners and hurting the same restaurants that commission caps are meant to protect.
During debate over New York City’s fee cap legislation, Chamber of Progress State and Local Policy Director Montana Williams testified before the City Council. Watch her full testimony here.
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