The delivery app DoorDash filed a federal lawsuit against New York City Wednesday morning, claiming a new law requiring food delivery platforms to share customer data with restaurants violates their customers’ right to privacy.
The law requires delivery apps to share customer data with restaurants, including the customer’s name, phone number, e-mail address, delivery address, and the contents of their orders. The legislation prohibits restaurants from selling customer information without their consent.
But the complaint filed by DoorDash said the law is an unconstitutional invasion of privacy that “imposes virtually no restrictions on what restaurants may do with that data, and it does not mandate any data-security requirements once the customer data is transferred to restaurants.”
Customers are allowed to opt-out of sharing their information with restaurants.
Nicholas Paolucci, a spokesman for the city’s law department said it would review DoorDash’s complaint, but said, “The law puts consumers first. It puts them in control of their information when they place orders through these apps.”
Manhattan Council Member Keith Powers, who sponsored the legislation, said it was intended to help local restaurants recover from the pandemic, and called for DoorDash to drop the lawsuit.
“After such a devastating year for our city’s restaurant industry, this precedent-setting law gives much needed relief to eateries to have better access to customer data and provides strong privacy protections,” Powers said in a statement.
The New York City Hispanic Chamber of Commerce also opposed the law. Before the legislation was passed this summer, it complained to the city council that sharing customer information could affect vulnerable, undocumented immigrants.
However, Andrew Rigie, executive director of the NYC Hospitality Alliance, argued in a statement that the app company "spends millions of dollars to take restaurants’ customers and withhold their information so they can control the market and extract more fees from small businesses... The Court should reject these claims as sour grapes and uphold the critical information sharing law that allows restaurants to connect directly with their own customers.”
The DoorDash lawsuit is the second one stemming from a package of legislation the City Council enacted this summer aimed at helping restaurants that suffered economically during the pandemic. A cap on the fees charged to restaurants by delivery apps was also challenged in court earlier this month by DoorDash, GrubHub and Uber Eats. The cap was approved after eateries complained they were forced to rely more than ever on costly delivery apps to survive when indoor dining was off limits or strictly curtailed.