Uber Eats, DoorDash, and Grubhub have settled a lawsuit with New York City over a cap on fees charged to restaurants.

The lawsuit, filed in 2021, opposed the city’s 15% fee limit that was implemented during the Covid-19 pandemic.

They argued the cap restricted contract negotiations and could raise prices for consumers while hurting restaurants and workers.

A court filing on June 4, 2025, indicated that the companies will withdraw their legal challenge once the city revises the law.

The final terms of the settlement are expected to be submitted to Manhattan federal court by December 31, 2025.

The settlement allows the companies to reopen the case if the revised law exceeds a 43% cap on combined service fees.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ The pandemic fundamentally transformed food delivery from luxury to necessity

The NYC delivery fee cap settlement reflects a market permanently changed by COVID-19, when restaurant delivery spending through apps nearly quadrupled between December 2019 and December 2022 1.

What began as a temporary emergency measure in May 2020 became a permanent fixture in August 2021, illustrating how pandemic-era regulations evolved alongside consumer behavior changes 2.

Even as pandemic restrictions eased, consumer reliance on delivery platforms remained significantly higher than pre-pandemic levels, with many restaurants reporting online sales jumping from 8% to between 30-50% of their total business 3.

This settlement recognizes that delivery has become an essential revenue channel for restaurants rather than an optional service, transforming the power dynamics between platforms and the businesses they serve.

The negotiated terms allowing for fees up to 23% for basic service and 43% for enhanced offerings represent a compromise between the original 15% cap and the platforms’ desire for complete pricing freedom 4.

2️⃣ Food delivery fee regulations reflect a growing nationwide policy trend

New York City’s fee cap was part of a broader regulatory movement, with similar legislation enacted in San Francisco, Chicago, Seattle, and other major cities to protect local restaurants from what lawmakers considered excessive charges 5.