Michaeli Bakery Files Class Action Suit Against Food Delivery Apps, Alleging Illegal Fees
A popular Lower East Side bakery this week filed a proposed class-action lawsuit against digital delivery platforms, including Grubhub, DoorDash,and Uber Eats, alleging the companies billed it and other restaurants more than allowed by New York City law.
According a report in the Wall Street Journal, the Michaeli Bakery on Division Street sued the platforms in response to its latest fee structure. Claiming that these fees go beyond city-imposed caps enacted last year as a way to help restaurants during the pandemic lockdown. The limits are 15% for delivery and 5% for other fees, based on a customer’s order.
Under the current city laws, ordering and delivery platforms can charge a credit card processing fee in addition to the combined 20% cap but only as a “pass through” fee equivalent to what the processing companies impose. The claim also alleges a routine inflation of the processing fees.
“[It is] a blatant violation of the law,” Michaeli’s attorney, Lee N. Jacobs, told the paper. He also relayed that other businesses plan to join the case if it becomes a class action.