Benzinga | Sep 10, 2021 07:36PM EDT

DoorDash, GrubHub, Uber Sue NYC - What You Need To Know

* DoorDash Inc (NYSE:DASH), GrubHub Inc (NASDAQ:GRUB), and Uber Technologies (NYSE:UBER) Eats have sued New York city for installing permanent fee caps on emergency delivery during the pandemic, CNBC reports.

* The companies alleged the City Council's cap of 23%, which translated into a 15% fee cap for delivery and 5% for app listing, and 3% for credit-card processing fees, had cost them hundreds of millions of dollars, the Wall Street Journal reports.

* The cap implied that GrubHub's commission would be limited to 8%. Previously the apps could charge restaurants commissions up to 30% per order.

* A permanent cap will force the companies to revise contracts with restaurants, reduce marketing and raise fees for consumers, alleged the trio.

* The restaurants were free to ditch their services if the prices bit them added the companies.

* The suit alleged that competitors like Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) and Yelp Inc's (NYSE:YELP) have been exempt from the capping.

* The companies sought an injunction to prevent the law from being enforced, rendering the bill unconstitutional and seeking damages from the city.

* DoorDash commanded 36% of July sales in the city, GrubHub 34%, and Uber Eats and Postmates a joint 30%, as per a Reuters report.

* DoorDash and GrubHub filed a similar lawsuit against San Francisco for fixing a permanent 15% delivery fee cap.

* Price Action: UBER shares traded lower by 0.63% at $40.10 on the last check Friday.