“The ordinance is unconstitutional because, among other things, it interferes with freely negotiated contracts between platforms and restaurants by changing and dictating the economic conditions under which a vibrant industry operates,” the lawsuit said.
A permanent cap likely means they will have to renegotiate or end contracts with restaurants and cut some services, the plaintiffs said in the lawsuit. It would also likely mean higher fees for people ordering delivery, they warned in the lawsuit.
“Left unchecked, the ordinance sets a dangerous precedent,” they wrote in the lawsuit.
“The initiative is legally sound and we will defend it in court,” the city’s legal department told CNN Business in response to a request for comment on the lawsuit.
Supporters of making the fee caps permanent said they were key to ensuring the survival of restaurants in the city, which have been hit hard by the pandemic. “By limiting, without expiration, the fees charged to restaurants by third-party food delivery services, we are ensuring that mom-and-pop stores have a real opportunity to recover and thrive,” said Francisco Moya, Member. of the New York council, in a statement. August.
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