DoorDash Inc. sued New York for a law that forces third-party food deliveries to share customer information, which the company says is a “shocking and invasive intrusion on consumer privacy.” The law requires companies that provide restaurants with online ordering and delivery services to share monthly information with restaurants that request information about customers who have placed orders, including names, phone numbers and email addresses. Uber Technologies Inc .: s Uber eats in costume over 15% limits the city that is charged on commissions charged by delivery services. In the previous complaint, the companies said that the law is “nothing but constitutional, harmful and unnecessary government measures that should be repealed.” The measures taken by the city are part of a package of bills aimed at regulating the food delivery industry, which was facing scrutiny during the pandemic when their businesses soared when restaurants were forced to close their dining halls. In the latest suit, DoorDash says the Information Sharing Act “virtually does not limit” what restaurants can do with data and does not need eateries to secure the information once they have received it. DoorDash says the law undermines the integrity of city residents who trust companies like that with “sensitive personal information that they would not entrust to small businesses that do not have similarly robust data security and security protocols. ”
When diners go to restaurants in person, they do not expect to have to disclose “the kind of sensitive personal information that the regulation requires DoorDash to disclose,” the company said. “Customers run a serious risk of having their personal information shared with any restaurant that fulfills its order on the DoorDash platform.”
DoorDash is asking a federal judge to issue an order blocking the bill from coming into force, saying it was passed to reduce DoorDash’s profitability and “to allow restaurants to run freely on DoorDash’s confidential, commercially valuable data.”
The company said the city ordinance is likely to backfire.
“Restaurants will use DoorDash’s trade secret data to compete directly with DoorDash, forcing DoorDash to change its services in a way that will result in fewer resources being offered to restaurants, fewer revenue opportunities for delivery bids and fewer choices for New York City customers. ”
The city’s legal department did not immediately respond to emails to comment on the suit.
The case is DoorDash Inc. v. City of New York, 21-cv-7695, U.S. District Court, Southern District of New York.