DoorDash sues New York City over data sharing rule

DoorDash sued New York City Wednesday over a new law that compels third-party delivery companies to share customer data with restaurants.

The rule requires delivery companies to comply with requests for monthly information including names, phone numbers and email addresses.

The lawsuit, filed in U.S. District Court for the Southern District of New York, alleges that the new law undermines privacy because no limits are placed on what restaurants can do with data provided to them. 

When customers get food in person they don’t expect to have to disclose “the kind of sensitive personal information that the ordinance requires DoorDash to disclose,” the suit argues.  

“Customers will face a serious risk of harm from their personal data being shared with every restaurant that fulfills their order on DoorDash’s platform,” it continues. 

Customers can choose to opt out of the data sharing on an order-by-order basis.

DoorDash is asking for a federal judge to issue an injunction blocking the measure from taking effect.

Restaurants and hospitality groups supported the legislation, arguing the data sharing will reduce the leverage delivery companies have over them. 

“DoorDash 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,” said Andrew Rigie, executive director at The NYC Hospitality Alliance, a group that pushed the bill. 

“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,” he added in a tweet. 

DoorDash last week joined UberEats and Grubhub in a separate lawsuit challenging another New York City policy capping the fees that delivery companies can charge restaurants.

Third-party delivery companies have seen their profits swell during the coronavirus pandemic. Initially viewed by many cities as a way to help keep local restaurants afloat, delivery companies have increasingly come under scrutiny by local officials. 

Dozens of cities have passed temporary delivery fee caps and regulators have sued the platforms over allegations of taking advantage of restaurants.