Michaeli Bakery Files Class Action Suit Against Food Delivery Apps, Alleging Illegal Fees

Posted on: June 10th, 2021 at 5:01 am by

Photo: Lily Brown

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.

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