DoorDash Sues New York City Once Again – This Time On the Basis of Data Sharing

September 16, 2021

Photo courtesy of Nations Restaurant News

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. 

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