DoorDash, Uber Sue NYC Over Mandatory Tipping Messages
America ı By Rihem Akkouche
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Property Rights Argument: A âRegulatory Takingâ
The companies allege the law violates the Fifth and Fourteenth Amendments by taking control over their platforms without compensation.
âThe Tipping Law improperly nullifies plaintiffsâ prior value-enhancing product decisions, forecloses future product innovations, and diminishes plaintiffsâ platformsâ economic value,â they argued.
Connected Litigation: Instacartâs Own NYC Challenge
The suit follows a Dec. 2 filing from Instacart challenging NYCâs Local Law 124 and several related regulations, including the same Local Laws 107 and 108. Instacart argues the legal framework creates a new category of âthird-party grocery delivery servicesâ and mandates workers be paid the restaurant-delivery minimum wage.
DoorDash Says Mandated Prompts Are âForced Taxationâ
In a Thursday blog post, DoorDash accused NYC of turning tipping into an indirect tax.
âWhile tipping remains voluntary, the fact is city law requires DoorDash to ask consumers to tip prior to completing checkout and dictates the amounts of suggested tip displayed,â the company wrote. âA reminder to tip is a courtesy; a forced solicitation may as well be a tax.â
DoorDash stressed it supports fair pay for its âdashersâ but opposes approaches that burden customers or limit product flexibility.
Representation
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DoorDash is represented by Gabriel Herrmann, Nicholaus C. Mills, Michael Holecek, Katie Townsend, and Connor P. Mui of Gibson Dunn & Crutcher LLP.
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Uber is represented by John C. Quinn, Trisha Anderson and Chloe Goodwin of Hecker Fink LLP.
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NYC counsel information was not immediately available.
A spokesperson for New York City Hall did not immediately respond to a request for comment.
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