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DoorDash is suing New York City over new data sharing law

DoorDash is suing New York City over new data sharing law

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

Carlo Allegri | Reuters

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

Earlier this summer, the city council approved a bill requiring delivery companies to share customer data, such as names, phone numbers, emails and delivery addresses, with restaurants that fulfill the order, unless a customer reports.

The law will enter into force in December.

DoorDash has certainly rejected the bill, calling it unconstitutional and undermining New Yorkers’ privacy. The company argued in the case that “there are virtually no restrictions on what restaurants may do with this data”, or guidelines for data security.

“In an era of growing concern for data protection and identity theft, this forced disclosure is a shocking and invasive intrusion into 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. It would, according to the case, force the company to “change its services in a way that will result in fewer resources being offered to restaurants, fewer earnings opportunities for delivery pricing, and fewer choices for New York City customers.”

Some restaurants have encouraged app-based delivery companies, such as DoorDash, Grubhub and Uber Eats, to share more customer data so that their dependence is not so strong on the platforms. Restaurants could market directly to the customers and should not feel locked inside using a service.

Wednesday’s suit is the latest in a series 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 tax ceilings installed during the pandemic permanent.

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

Similarly, DoorDash and Grubhub sue San Francisco, which also imposed a permanent ceiling of 15% on fees.

New York’s mayor’s office did not immediately respond to a request for comment.

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