DoorDash’s NYC Lawsuit Is About Keeping Your Data From Restaurants
DoorDash is yet again showing that it sees restaurants as merely a supplier in its relationship with diners, despite more and more customers seeing companies like DoorDash as an unfortunate middleman between them and restaurants. The delivery app — the largest in the country — is suing New York City over a new law that would require it to share customer data with restaurants, claiming that it is a violation of the First Amendment.
New York City’s new law, approved by the City Council this summer, and which would take effect in December, is one of many recent regulations that target the exploitative nature of third-party delivery apps. “This law would simply allow restaurants and their customers to share a direct relationship instead of having mega-sided delivery companies be the gatekeepers and control the marketplace, often at everyone else’s expense,” Andrew Rigie, executive director of the New York Hospitality Alliance, told Amsterdam News.
Presumably, DoorDash understands those restaurants could potentially use that data to court these users directly, decreasing their increasingly fraught reliance on apps — and their ever-escalating marketing fees — to reach customers. It called the law “a shocking and invasive intrusion of consumers’ privacy,” and declared that it is akin to asking the company to share trade secrets. “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,” it said in the lawsuit. The company also claimed that the law puts no restrictions on what restaurants can do with that data.
There are legitimate privacy concerns when it comes to sharing data. Though the proposed law stipulates customers would be able to opt-out of sharing their personal information, some local activist groups have made bedfellows with DoorDash, saying that the law could have dangerous repercussions for marginalized New Yorkers. “…It is particularly concerning for communities of color, vulnerable populations and undocumented immigrants who use these apps,” read a joint letter from the National Action Network, the New York Urban League and Arc of Justice. “Their safety could be in danger if this bill proceeds in its current form. This is obviously not legislators’ intent, but it highlights that more work should be done to strengthen this bill before it is voted on.”
However, DoorDash is likely more concerned with its bottom line than it is the plight of undocumented immigrants. “Certain billion-dollar third-party delivery companies have a long history of exploiting local restaurants and misleading the public in order to win their political battles,” Rigie, of the New York Hospitality Alliance, said.
When not spending hundreds of millions of dollars to pass (unconstitutional) legislation that strips workers of their rights, DoorDash and other third-party delivery apps have increasingly engaged in legal battles over attempts to curb some of their most exploitative practices. Recently, Chicago sued Grubhub and DoorDash for preying on restaurants, lying to customers about fees, and stealing tips from delivery drivers. Chicago and New York are also among the cities which have instituted temporary caps on the percentage of fees third-party delivery apps can charge restaurants, as commission fees, many of which were hidden from restaurants, could exceed 30 percent.
To be clear, DoorDash would not have customer data to hoard if it weren’t for the restaurants that diners wanted to order from. DoorDash is not making your burger, and in many cases it’s not even employing your delivery person. But it and companies like it are middlemen who rely on gatekeeping to keep delivery customers locked into a relationship with them, rather than the restaurants actually producing the food. They’ve recently gotten in trouble for charging commission fees on phone calls that come through rerouted phone numbers which are often listed publicly instead of the restaurant’s actual phone number — even if those phone calls don’t result in actual orders. DoorDash, Postmates, and Grubhub have also been called out for listing restaurants without their permission, including restaurants that don’t even offer delivery.
At the same time, delivery apps have begun investing in ghost kitchens and other delivery-only businesses that would allow them to cut out existing restaurants completely in favor of their own, effectively white-labeled meals — a far cry from the ubiquitous marketing campaigns that have blanketed cityscapes throughout the pandemic, asking diners to “save restaurants” by ordering delivery, and leading to record revenues for every major delivery app.
It may be impossible to bypass third-party delivery apps completely: Many restaurants do rely on them to provide online ordering and delivery services, which have become ever more essential for survival during the pandemic. But these are businesses that care about the wellbeing of restaurants in much the same way a parasite relies on the wellbeing of its host. By all means, don’t stop ordering delivery. Maybe just go to the restaurant’s actual website to see how they’d prefer you order.
