Judge rejects DoorDash, Uber bid to block New York City tipping laws

By Jonathan Stempel

NEW YORK, Jan 23 (Reuters) – A federal judge rejected DoorDash’s and Uber Technologies’ request to block New York City laws that would require food-delivery apps to provide customers an option to tip delivery workers when paying.

In refusing to issue a preliminary injunction, U.S. District Judge George Daniels in Manhattan said the companies did not show a clear likelihood of demonstrating that the laws, including a requirement that they suggest a minimum 10% tip before customers place orders, violated their constitutional free speech rights.

Daniels also said an injunction would not serve the public interest, in light of evidence that DoorDash’s and Uber’s practices have “on balance” led to lower tips for delivery workers.

“The tipping laws advance the city’s goals of enhancing cost transparency at the time of checkout, restoring consumer choice, and providing protections to delivery workers,” the judge wrote.

While tipping remains optional, DoorDash and Uber said requiring them to suggest a minimum 10% tip would reduce business from customers burdened by rising prices and suffering from “tipping fatigue.”

Daniels’ decision is dated January 22 and was made public on Friday. The laws take effect on January 26.

DoorDash said it was disappointed with the decision. “Forcing platforms to solicit a tip before checkout at a time when New Yorkers are sick of tipping culture and facing a growing affordability crisis is bad policy,” a spokesman said.

Uber and its lawyers did not immediately respond to requests for comment. New York City’s Department of Consumer and Worker Protection did not immediately respond to similar requests.

New York City has had several court battles with delivery app companies, including over a first-in-the-nation law in 2023 that guaranteed minimum pay for workers.

It also said DoorDash and Uber made changes, which the city labelled “design tricks,” to their platforms since the minimum pay law took effect, costing delivery workers $554 million in tips even as tipping on rival platforms held steady.

New York City Mayor Zohran Mamdani has criticized the delivery app industry. Last week, his administration warned DoorDash, Uber, Grubhub, Instacart and other companies to comply with tipping and other worker protection laws.

(Reporting by Jonathan Stempel in New York; Editing by Aurora Ellis)