DoorDash $DASH ( ▲ 2.79% ) and Uber Eats $UBER ( ▼ 1.08% ) are suing New York City over a new law that will force customers to tip at checkout instead of after their food arrives. The companies argue the rule acts like an added tax and pushes consumers to tip upfront. The law is set to take effect in January and was designed in response to how delivery apps changed their tipping flows after the city implemented a minimum wage for delivery workers.
When that wage rule kicked in last December, both companies shifted the tipping prompt from checkout to post-delivery, which softened the initial sticker shock for customers. But city data shows the move led to higher overall fees and lower tipping across the platforms.
This isn’t the first clash between the delivery firms and New York City. DoorDash and Uber previously sued to stop the minimum wage law but lost. The latest fight also arrives as Zohran Mamdani, a Democratic Socialist candidate who campaigned on strong pro-worker policies, prepares to take office as the city’s next mayor. DoorDash donated $1 million to a super PAC backing Andrew Cuomo, who ran against Mamdani.