By Jonathan Stempel NEW YORK (Reuters) -DoorDash, Grubhub and Uber Eats have settled lawsuits against New York City over laws that boosted minimum wages for delivery workers and capped how much the companies could charge restaurants for delivering meals. The settlement filed on Wednesday in federal and state courts in Manhattan would let the companies […]
U.S.
DoorDash, Grubhub, Uber Eats settle with New York City over minimum wages, fee caps
Audio By Carbonatix
By Jonathan Stempel
NEW YORK (Reuters) -DoorDash, Grubhub and Uber Eats have settled lawsuits against New York City over laws that boosted minimum wages for delivery workers and capped how much the companies could charge restaurants for delivering meals.
The settlement filed on Wednesday in federal and state courts in Manhattan would let the companies sometimes charge more than they can under the current law, which the city adopted in May 2020 in response to the COVID-19 pandemic.
DoorDash, Grubhub and Uber Eats agreed to dismiss their lawsuits with prejudice, meaning they cannot be filed again. The settlement anticipates the New York City Council will enact the proposed changes into law.
A spokesperson for Mayor Eric Adams on Thursday called the settlement “a victory for all workers,” saying the lawsuits caused delays that cost millions of dollars in wages.
Since the so-called Minimum Pay Rate took full effect on April 1, delivery workers make before tips at least $21.44 an hour, up from $5.39 an hour two years ago.
A Grubhub spokesperson said the settlement affords restaurant owners “greater ability to reach customers while preserving important safeguards for their business.”
DoorDash and Uber did not immediately respond to requests for comment.
New York City’s fee cap law restricted the food delivery companies from charging restaurants more than 15% for delivering food orders and 5% for advertising and other services.
The city intended the law to shore up a restaurant industry beset by closures and upset with fees as high as 30%.
While the caps were intended to be temporary, they became permanent in August 2021.
DoorDash, Grubhub and Uber Eats said the caps deprived them of their constitutional right to contract with restaurants, and forced them to operate in the city at a loss while giving up hundreds of millions of dollars in revenue.
They also warned they would have to pass the costs of higher wages to consumers, hurting restaurants.
When the litigation began, San Francisco had also enacted permanent commission caps.
(Reporting by Jonathan Stempel in New York; Editing by Leslie Adler, Jamie Freed, Cynthia Osterman and Jan Harvey)