GrubHub and DoorDash Sue San Francisco Over Delivery Fee Cap

Food delivery apps became a saving grace for many during the pandemic, but their assistance came at a cost. As restaurants struggled to stay in business, San Francisco cracked down with an emergency 15% cap on delivery fees charged to restaurants. The city then became the first in the nation to pass a permanent 15% cap in June.

Now the delivery apps are fighting back. On July 16, GrubHub and DoorDash sued San Francisco over the permanent ordinance.

“The City of San Francisco passed hasty, detrimental, and unconstitutional price controls which leave us no choice but to resolve this matter in court,” a spokesperson for DoorDash said in a statement. “Not only do permanent price controls violate the US and California Constitutions, but they will likely harm the very restaurants the city purports to support. Imposing permanent price controls is an unprecedented and dangerous overreach by the government and will limit the options small businesses rely on to compete in an increasingly competitive market.”

San Francisco Supervisors Ahsha Safai and Aaron Peskin, who sponsored the legislation, maintain that the permanent ordinance is necessary to prevent third party delivery apps from gouging local restaurants. They’re confident the city can successfully defend the lawsuit.

Read more at Restaurant Business Online and the San Francisco Chronicle.