Door Dash, Inc. filed a complaint in the Southern District of New York on Wednesday over a new ordinance the company says violates customer privacy.
The New York City Council proposed a bill in May to require food delivery apps to share customer data with restaurants. The bill took effect on August 29. Delivery services do not have to share data with restaurants unless the restaurant requests it, and customers can opt out of data sharing.
In its complaint, Door Dash alleges that the law is “an unconstitutional compulsion of speech in violation of the First Amendment, an unconstitutional taking of DoorDash’s valuable commercial information, [and] an unconstitutional impairment of private parties’ contractual bargains.”
Door Dash also asserts that small businesses do not have the same data security that delivery services have to protect customer phone numbers, email addresses, and delivery addresses. In its complaint, the company cites concerns from the New York City Hispanic Chamber of Commerce and the Haitian American caucus that the law will put undocumented customers at risk.
Council Member Keith Powers, who proposed the bill, said the legislation is an attempt to “strike the right balance and equity between those that hold the information and those that supply the goods and services.” Powers recognized that the COVID-19 pandemic negatively affected many restaurants and sought to “think about ways to keep them surviving here in the city…”
After receiving criticism for high fees during the pandemic, Door Dash announced a new payment structure in April. Door Dash now charges restaurants 15 to 30 percent commission based on the restaurant’s chosen payment plan. High commission plans expose restaurants to more customers and serve larger delivery areas. The company now takes a 6 percent commission for all pick-up orders.
Door Dash seeks a jury trial and a declaration that the ordinance is unconstitutional.