Uber and DoorDash Try To Halt NYC Law That Encourages Tipping

An anonymous reader quotes a report from the New York Times: Two of the largest food-delivery app companies have made a last-ditch effort to overturn tipping laws in New York City that go into effect in January just as its next mayor, who has been highly critical of the companies and the app industry, takes office. Tips to delivery workers have plummeted since some food-delivery apps switched to showing the tipping option only after a purchase had been completed; that change came after New York City established the country's first minimum pay-rate for the workers in 2023. The new laws will require the apps to suggest a minimum tip of 10 percent at checkout, though customers can contribute more or less, or nothing at all.

Two of the app companies, DoorDash and Uber, filed a joint federal lawsuit in the Southern District of New York late last week targeting the City Council legislation, arguing that the new rules violated the First Amendment by requiring them to "speak a government-mandated message" and exceeded the Council's authority. Although tipping will be optional under the law, the companies wrote in the suit that a "mandated pre-delivery 10 percent tip suggestion" would cause customers to use the app less because they were suffering from "tipping fatigue." "Lessened engagement would result in fewer orders," the suit said.