Delivery apps like DoorDash, Uber Eats and Grubhub won’t have to share detailed customer data with restaurants in New York City, a federal judge said on Tuesday.
Judge Analisa Torres ruled that a law requiring delivery services to hand over things like customers’ full names, email addresses, phone numbers and addresses violates the companies’ First Amendment rights.
It marks a victory for delivery apps and a blow to restaurants, which have long wanted more information on their delivery-app customers. As of now, they receive only a customer’s first name, last initial and what they ordered.
New York's Customer Data Law would have required the apps to provide customer information to restaurants upon request. Customers would have been able to opt out of having their data shared.
The New York City Council passed the first-of-its-kind law in July 2021, as restaurants were recovering from the worst of the pandemic. Lawsuits from DoorDash, Uber Eats and Grubhub soon followed, preventing it from ever going into effect.
Backers of the law said it would help even the playing field between restaurants and delivery apps, which they had come to depend on during the pandemic. Restaurants could have used the data to learn more about their customers as well as market to them directly.
Delivery apps raised concerns about customer privacy and restaurants’ ability to safeguard the data. And in lawsuits, they argued that the law violated their First Amendment rights by illegally dictating what they could do with data they had collected.
The judge agreed with that argument, using an interpretation of the First Amendment that considers customer data a form of speech.
“The Customer Data Law restricts how Plaintiffs can use the customer data they collect,” Torres wrote in her decision. “Previously, when restaurants requested customer data from Plaintiffs, they could decline to provide it. Under the Customer Data Law, Plaintiffs have only one option: They must provide specific customer data in a machine-readable format at least once a month.”
Data ownership has long been a sticking point between delivery apps and restaurants. The data is valuable to both parties for marketing and other purposes, and it has helped fuel the delivery apps’ massive growth in recent years.
The law was one of a number of efforts by New York City to regulate delivery services in the name of helping restaurants. New York also put a permanent cap on what the apps can charge restaurants for their services, though there are efforts underway to ease the cap.
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