DoorDash, Grubhub, and Uber Eats have reached a settlement with New York City over a long-running legal battle concerning limits on delivery fees.
Filed in Manhattan federal court on Wednesday, the agreement allows the food delivery platforms to charge restaurants more than the city’s current cap in some circumstances, pending legislative changes.
New York’s law, enacted in May 2020 during the COVID-19 pandemic, capped delivery fees at 15% and limited charges for advertising and related services to 5%.
Though initially intended as a temporary measure to support struggling restaurants, the caps were made permanent in August 2021, prompting the platforms to sue a month later.
The delivery giants argued the law violated their constitutional rights, forcing them to operate at a loss and preventing them from freely contracting with restaurants. They claimed it resulted in hundreds of millions in lost revenue.
Under the settlement, the companies have agreed to drop the lawsuit with prejudice, meaning they cannot refile the case. The deal assumes the New York City Council will follow through with planned amendments to the law.
Neither the companies nor city officials have commented publicly on the settlement.
The legal challenge was among the most prominent disputes over permanent commission caps in the US, with San Francisco implementing similar restrictions during the same period.
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