DoorDash, Uber sue NYC to block tipping mandate for workers

Despite being competitors, DoorDash and Uber have joined forces to sue New York City, seeking to block new regulations that would require delivery apps to offer a tipping option at checkout with a default minimum of 10%.

In their legal complaint, the companies argue that the mandate infringes upon their First Amendment rights by compelling them to endorse the city’s preferred messaging on their private platforms.

The new NYC rule is set to take effect on January 26. It is the city’s response to the changes the companies made following the 2023 delivery worker minimum-wage hike. After that wage rule, apps increased service fees and moved the tipping function to after checkout to mitigate sticker shock for consumers.

While the minimum-wage standard has successfully raised workers' hourly pay, it has also led to a 64% decline in customer tipping.

DoorDash claims the new tipping rule unfairly pressures inflation-weary customers and could lead to millions of dollars in lost revenue as order volumes fall.