U.S. federal judges reject DoorDash, Uber, Instacart bids to block New York City tipping laws

The DoorDash logo is seen on a building in Santa Clara, Calif. (Shutterstock)

NEW YORK - U.S. federal judges rejected DoorDash, Uber Technologies and Instacart’s bids for injunctions to block a series of New York City laws governing food-delivery apps, including a requirement that they give customers an option to tip delivery workers when paying.

U.S. District Judge George Daniels in Manhattan said DoorDash and Uber did not show a clear likelihood that a requirement that they suggest a minimum 10 per cent tip before customers place orders would violate their constitutional free speech rights.

Daniels said the tipping laws “advance the city’s goals of enhancing cost transparency at the time of checkout, restoring consumer choice, and providing protections to delivery workers.”

Separately, U.S. District Judge John Koeltl in Manhattan rejected Instacart’s argument that New York’s state legislature forbade the city from mandating the tipping option, and from requiring grocery delivery apps such as Instacart to offer delivery workers the same minimum pay available to restaurant delivery workers.

The companies, all based in San Francisco, warned that the laws could reduce business.

DoorDash and Uber said the tipping disclosure rule would dissuade customers burdened by rising prices and “tipping fatigue” from ordering, while Instacart said raising worker pay could lead to higher grocery delivery costs.

Both decisions are dated Jan. 22 and were made public on Friday. The laws take effect on Jan. 26.

Mamdani criticized delivery app industry

All three companies said they plan appeals.

“Forcing platforms to solicit a tip before checkout at a time when New Yorkers are sick of tipping culture and facing a growing affordability crisis is bad policy,” a spokesperson for DoorDash said.

Uber’s lawyers did not immediately respond to requests for additional comment.

A spokesperson for Instacart, the trade name for publicly traded Maplebear, called Koeltl’s decision “a step in the wrong direction for New York workers and families.”

New York City has had several court battles with delivery app companies, including over a first-in-the-nation law in 2023 that guaranteed minimum pay for workers.

It also accused DoorDash and Uber of making changes, which the city labeled “design tricks,” to their platforms since the minimum pay law took effect, costing delivery workers US$554 million in tips even as tipping on rival platforms held steady.

New York City Mayor Zohran Mamdani has criticized the delivery app industry. Last week, his administration warned DoorDash, Uber, Instacart, Grubhub and other companies to comply with tipping and other worker protection laws.

Sam Levine, commissioner of New York City’s Department of Consumer and Worker Protection, said the judges’ decisions “ensure that workers get paid, and consumers have the option to tip freely.”

Jonathan Stempel, Reuters