NYC Will Not Enforce Data-Sharing Law on Food Delivery Apps

DoorDash sued the city over the law claiming user privacy rights.

October 07, 2021

DoorDash Employee on a Bike

NEW YORK—New York City has decided not to enforce a law that would require food delivery companies to share customer data with restaurants, reports Reuters.

Last month, DoorDash filed a lawsuit against the city over a law that would require it to share customer information with restaurants, such as a customer’s name, phone number, email and delivery address, in order for restaurants to complete a customer’s order.

The U.S. District Court in Manhattan ruled that the city would not enforce the law while the lawsuit is being settled. DoorDash withdrew its request for an injunction to block enforcement.

The law, which goes into effect in December, allows restaurants to use DoorDash’s trade secrets in order to compete with the delivery company, claims DoorDash. The delivery company says it would 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,” according to the lawsuit.

The lawsuit also states that restaurants have no restrictions on what they can do with the information, and there aren’t requirements on how to store the data and keep the private information safe.

The issue of access to customer data when restaurants and convenience stores use third-party delivery services like DoorDash has grown contentious. Businesses that rely on the third-party model want to ensure the best customer service, reduce fees associated with the partnerships and access to customer data to help with marketing and loyalty programs. NACS Magazine covered the tradeoffs between using third-party delivery services and using store-owned services in “Delivery Dilemma” in the September 2021 issue.

Recently, New York City passed a package of six bills aimed to improve food delivery workers’ on-the-job conditions. The bills prohibit food delivery apps and courier services from charging workers fees to receive their pay, set minimum payments per trip and mandate that apps disclose their gratuity policies. The measures also prohibit charging delivery workers for insulated food bags and stipulate that restaurant bathrooms must be available to delivery workers or otherwise subject to a fine. The bills also allow delivery workers to determine which deliveries they want to take without fear of retribution, as workers have been targeted by robbers.