Doordash, Grubhub, and Uber Eats sue NYC for its law capping the amount of commissions the apps can charge, say the law is harmful government overreach
Food-delivery companies contend the cap is harmful, constitutes government overreach — DoorDash Inc., Grubhub Inc …
Context & Ripple Effects
The lawsuit is the platforms' counterstrike a month after the New York City Council passed five bills aimed at curbing the delivery apps' power, including the 15% commission cap extended to Feb. 2022. It is the first court test of whether a city can dictate the take rate a marketplace charges its merchants.
The fight did not end here: the same three companies sued NYC again in 2023 over minimum pay standards for gig workers, and the commission-cap case itself ran until the parties agreed to settle it in 2025 — a four-year arc that made New York the template for platform regulation.
First-order effects
- DoorDash, Grubhub, and Uber Eats are now litigating against their largest regulatory antagonist instead of complying, freezing the cap's expansion while the case proceeds.
- NYC restaurants keep the 15% ceiling on commissions for now, directly capping the apps' revenue per order in the biggest US delivery market during the pandemic takeout surge.
Second-order effects
- Blocked from raising restaurant commissions, the apps shift cost recovery to consumers — the same pass-through pattern later visible when [[a:868155|fee increases in NYC and Seattle after wage laws coincided with plunging orders and frustrated drivers]].
- Other cities watching the case gain a tested playbook: regulate the take rate, absorb the lawsuit, and negotiate — while the platforms' litigation-first stance raises the cost of being first mover for every city council considering a cap.
Third-order effects
- If the pattern holds, delivery economics split into regulated and unregulated markets, with take rates, driver pay, and consumer fees all set in negotiation between cities and platforms rather than by the apps unilaterally — a structural check the industry has fought in court since the 2015 contractor-classification suits.
- Sustained fee and commission pressure compounds competitive divergence: Grubhub's US share slid from about 10% in 2023 to about 4% in 2025, suggesting regulation accelerates consolidation toward the platforms best able to absorb it.
The trend: US cities are moving from taxing delivery apps to regulating their core economics — commission caps, pay floors, fee rules — and the platforms' courtroom resistance is becoming a standard, losing phase of each regulatory cycle.