A New York City law that forced DoorDash, Uber Eats and Grubhub to hand over customers' full names, phone numbers, delivery addresses and order histories to local restaurants has been struck down as unconstitutional. The 2nd U.S. Circuit Court of Appeals issued the decision in Manhattan, upholding an earlier ruling and dealing a fresh setback to New York City's yearslong push to regulate the food-delivery industry.
The ruling was first reported by Jonathan Stempel for Reuters. At issue was New York City's Local Law No. 90 of 2021, which required third-party delivery platforms to share diners' full names, email addresses, phone numbers, delivery addresses and order histories with restaurants upon request, unless a customer explicitly opted out, according to Practical Law.
What the Data-Sharing Mandate Required
Before the 2021 ordinance, standard practice among the major delivery apps was to share only a diner's first name, last initial and order contents with restaurants — the bare minimum needed to fulfill an order, according to Courthouse News. The city's mandate went far beyond that norm, requiring apps to turn over a customer's full contact and address information along with a running history of their orders.
A First Amendment Fight Two Years in the Making
DoorDash, Grubhub and Uber Eats first sued New York City over the data law in September 2021, just six days after filing a separate federal suit challenging the city's permanent caps on delivery commissions, per Malay Mail.
U.S. District Judge Analisa Torres, who had already stayed enforcement of the law while the case played out, granted summary judgment to the three delivery apps in September 2024, declaring the Customer Data Law unconstitutional on First Amendment commercial-speech grounds, as reported by Restaurant Dive.
Applying the Central Hudson commercial-speech framework, Torres found that while helping local restaurants recover from the pandemic was a legitimate city goal, "a mere preference for one industry over another is not a substantial state interest" strong enough to justify forcing the apps to hand over private customer data, according to The Free Speech Center.
Appeals Judges Pressed the City on Chick-fil-A
During oral arguments in April, U.S. Circuit Judge Richard Wesley questioned New York City attorneys on how the Customer Data Law could be aimed at preserving small local restaurants when large global chains like Chick-fil-A would also benefit from the same mandatory disclosures, according to Courthouse News. The outlet also reported that the delivery apps had argued in court filings that the mandatory data transfers posed serious privacy risks, since the city law placed virtually no data-security or retention requirements on the restaurants that would receive the information.
Restaurants' Case for Data Access
The NYC Hospitality Alliance had defended the law, arguing that delivery platforms hold monopoly power over customer data that keeps local restaurants from leaving the apps without losing access to their diner base entirely, according to Nation's Restaurant News.
The scale of that dependence is significant: 2023 court disclosures showed DoorDash alone served roughly 2.5 million customers in New York City, while Uber Eats had contracted with more than 16,000 local merchant partners and Grubhub worked with 23,000 businesses citywide, per Legal Newsline.
Part of a Bigger Fee Fight
The data-sharing case has unfolded alongside New York's broader effort to rein in delivery-app costs for restaurants. Hoodline previously reported that the city's Department of Consumer and Worker Protection found delivery-app merchant fees ate up roughly 19% of order subtotals in early 2024, part of the financial friction that has driven City Hall's regulatory push against the platforms since its HungryPanda fee settlement.
What Comes Next
It remains unresolved whether New York City will try to draft a more narrowly tailored data-privacy law or appeal the 2nd Circuit's ruling to the U.S. Supreme Court. The fight is also being watched by other cities weighing similar restaurant-data rules, including San Francisco and Chicago, according to Nation's Restaurant News.
