DoorDash, Grubhub and Uber Eats reached a settlement in Manhattan federal court on Wednesday, agreeing to drop their lawsuit against New York City challenging a cap on the fees the companies charge restaurants for meal deliveries.
The law, initially implemented in May 2020 to aid restaurants during the COVID‑19 pandemic, limits delivery commissions to 15% and restricts fees for advertising and related services to 5%. Though it was intended as a temporary measure, the cap became permanent in August 2021, which prompted the delivery platforms to sue one month later, asserting that the restrictions violated their contractual rights and inflicted substantial financial losses.
Under the proposed settlement, the companies may occasionally exceed current fee limits, in anticipation that the New York City Council will amend the law. In conjunction with the agreement, DoorDash, Grubhub and Uber Eats will dismiss their lawsuit with prejudice, barring any future legal action on the matter.
The dispute had been proceeding since a Manhattan judge in 2023 declined to dismiss the case, which had garnered attention as cities like San Francisco enacted similar fee caps.
Lawyers for the delivery platforms and representatives for the city did not immediately respond to requests for comment.
The settlement marks a notable resolution in a high-profile legal battle, with implications for how municipalities regulate third-party delivery services and negotiate with platform providers.
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