DoorDash filed a lawsuit against New York City today over a law that requires it to share the data that it collects on customers with restaurant establishments.
Background
The bill was part of a package passed by City Council over the summer which, amongst other things, required apps to share customer data – including their names, phone numbers, emails, and delivery addresses – with the restaurants that are fulfilling the customers’ orders. According to DoorDash’s privacy policy, it reserves the right to collect and share customer’s personal data only “for the purpose of performing services on our behalf.” DoorDash may share customer information if the customer logs into the app with their Facebook account, for example; it may also share customer information with third-party companies, whether they handle payment processing or marketing. They don’t, however, share customer information with restaurants. As such, and compounded with a litany of other detrimental practices that these third-party food delivery services engage in to hurt food establishments, restaurant operators have called for increased access to consumer data. Although these calls began prior to the pandemic, the past year and a half has taken such a significant toll on restaurants – as consumers overwhelmingly shifted towards delivery services – that reducing their reliance on apps is necessary for their survival.
The Lawsuit
DoorDash is arguing that the law essentially allows restaurants to use its trade secrets to better compete with it. The suit states that “by forcing DoorDash to disclose that trade secret to restaurants, the ordinance eliminates DoorDash’s central property right in the trade secret — the right to exclusive use, and the right to exclusive use is the reason the trade secret has economic value.” DoorDash also argues that the law imposes no restrictions on what restaurants can do with said data, nor does it outline specific requirements that they must follow in order to safeguard and store the data. Should the law remain in place, the company has stated that it will have to “modify its services in a way that will result in fewer resources being offered to restaurants, fewer earnings opportunities for delivery couriers, and fewer choices for New York City customers.”
This is not the first time that DoorDash has sued New York City. In fact, it is the second suit it has filed just this week! On September 10th, DoorDash joined its competitors – Uber Eats and Grubhub – to sue the city to halt a permanent delivery fee cap that was also part of City Council’s summer bill package.
Founded by attorneys Andreas Koutsoudakis and Michael Iakovou, KI Legal focuses on guiding companies and businesses throughout the entire legal spectrum as it relates to their business including day-to-day operations and compliance, litigation and transactional matters.
Connect with Andreas Koutsoudakis on LinkedIn.
Connect with Michael Iakovou on LinkedIn.
This information is the most up to date news available as of the date posted. Please be advised that any information posted on the KI Legal Blog or Social Channels is being supplied for informational purposes only and is subject to change at any time. For more information, and clarity surrounding your individual organization or current situation, contact a member of the KI Legal team, or fill out a new client intake form.
The post DoorDash Sues New York City Once Again – This Time On the Basis of Data Sharing appeared first on KI Legal.