DoorDash and Uber have filed a federal lawsuit against New York City, challenging new regulations that require their apps to present a tipping option at checkout and set a default tip of at least 10% of the order’s cost.
Legal basis of the challenge
The regulations, which will take effect on Jan. 26 after being passed last summer, are alleged by the companies to infringe on constitutional free‑speech rights by forcing them to “speak a government‑mandated message in a prescribed manner and at a prescribed time.” The plaintiffs are also seeking an injunction and monetary damages, arguing the laws violate their property rights “without just compensation.”
The complaint asserts that the companies are “conscripted to amplify the City’s message” despite recent increases in food‑delivery costs tied to the city’s guaranteed minimum‑earnings rules for delivery workers.
DoorDash and Uber also reference “tipping fatigue” and “generally rising prices,” contending that the mandatory tip prompts could depress customer usage and hurt their bottom lines.
The lawsuit warns that suggested tip amounts may shift tipping from a voluntary recognition of good service to an expectation, regardless of service quality. In a separate release, DoorDash described the law as turning tipping into an “added tax” amid an “affordability crisis.”
Broader context
This case is the latest salvo by major tech firms aiming to curb regulations affecting their business models and delivery‑worker compensation, a movement that has intensified as workers have organized for better wages and conditions.
The timing coincides with the final weeks of Mayor Eric Adams’ administration and the upcoming transition to Mayor‑elect Zohran Mamdani, who campaigned on a pro‑labor platform.
Uber has not responded to requests for comment, while a spokesperson for the city’s Law Department indicated the agency will review the lawsuit once served.
City Councilmember Shaun Abreu, the author of the legislation, said delivery apps previously “hid” tipping options to obscure full costs after the city instituted a minimum wage for food‑delivery workers. The Council’s expansion of protections to grocery delivery workers reflects the same policy intent.
Abreu contended that concealing tipping options has cost delivery workers “millions of dollars” in lost gratuities, underscoring the financial stakes for frontline couriers.
This story has been updated with additional information.
Frequently Asked Questions
What specific provisions are DoorDash and Uber challenging?
They are contesting laws that require a tipping option at checkout and set a default tip of at least 10% of the order’s cost.
On what constitutional grounds do the companies base their lawsuit?
They claim the laws violate their free‑speech rights by compelling them to convey a government‑mandated message and infringe on their property rights without just compensation.
What concern did City Councilmember Shaun Abreu raise about tipping on the platforms?
Abreu said the apps had been “hiding” tipping options, resulting in millions of dollars of lost gratuities for delivery workers, and argued that making it harder to tip is “plain wrong.”
How do you think this legal battle could affect the future of gig‑economy regulations?
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