DoorDash and Uber Eats are suing New York City over a new law that tells delivery apps how and when they must ask customers for tips. The companies state the city is going too far and violating their constitutional rights.
The law—scheduled to take effect in January—requires apps to present a tipping option before check out and showcase a suggested tip of at least 10 percent of the order total. The tip prompt must be “plain” and “conspicuous,” meaning it can’t be subtle or easy to miss, according to the NYC law. Apps can still allow tipping after delivery, but they must show the pre-checkout prompt.
The companies state the city is forcing them to promote a message they don’t agree with—that customers should tip upfront and that 10 percent is an appropriate amount. Uber Eats and DoorDash argue this is compelled speech, which they say violates the First Amendment. They also claim customers are already experiencing “tipping fatigue,” and forcing this prompt could turn customers away.
The aggregators believe this will hurt their business, restaurants, and delivery workers by reducing orders.
The goal of the lawsuit is to block the new law from taking effect prior to January.
“In the midst of an affordability crisis, the New York City Council has turned tipping into essentially an added tax by forcing platforms like DoorDash to pressure consumers to tip at checkout,” DoorDash said in a statement.
Additionally, DoorDash emphasized it is in favor of delivery drivers being paid fairly. New York City already passed a minimum pay rule that requires delivery workers to earn a set hourly wage before tips. After that rule took effect, the apps moved tipping to after delivery to keep costs down for customers.
The lawsuit notes that NYC drivers are guaranteed $21.44 per hour, and that they typically earn around $30 per hour, not including tips.
“We disagree with policies that unfairly pressure consumers and remove our options to bring balance to ordering experience,” DoorDash said. “It should be up to consumers, not the City Council, whether they want to leave a tip in New York.”
DoorDash and Uber Eats are the two largest third-party delivery aggregators in the U.S.
