DoorDash sues New York City over new data sharing law

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A DoorDash sign is pictured on a restaurant on the day they hold their IPO in New York, December 9, 2020.

Carlo Allegri | Reuters

DoorDash filed a lawsuit Wednesday against New York City over a new law that requires delivery companies to share more customer data with its restaurants.

The City Council approved a bill earlier this summer that delivery companies have to share customer data, such as names, phone numbers, emails and delivery addresses, with restaurants that fulfill the order, unless a customer opts out.

The law is set to take effect in December.

DoorDash has adamantly disavowed the bill, calling it unconstitutional and undermining of New York City residents’ privacy. The company argued in the suit that there’s “virtually no restrictions on what restaurants may do with that data,” nor guidelines on data security.

“In an era of heightened concerns about data privacy and identity theft, this compelled disclosure is a shocking and invasive intrusion of consumers’ privacy,” DoorDash said in the complaint.

The company also argued that restaurants will be able to use its trade secrets to compete directly with DoorDash. That would, according to the suit, force the company to “modify its services in a way that will result in fewer resources being offered to restaurants, fewer earnings opportunities for delivery couriers, and fewer choices for New York City customers.”

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. Restaurants could market directly to customers and wouldn’t have to feel locked-in to using a service.

Wednesday’s suit is the latest in a string of complaints between food delivery platforms and regulators. 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 pandemic permanent.

The companies claim the law is unconstitutional because “it interferes with freely negotiated contracts between platforms and restaurants by changing and dictating the economic terms on which a dynamic industry operates.”

Similarly, DoorDash and Grubhub are suing San Francisco, which also introduced a permanent 15% delivery fee cap.

The New York City’s Mayor’s office did not immediately respond to a request for comment.

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