New York City must face a lawsuit filed by DoorDash Inc., Grubhub Inc. and Uber Technologies Inc.’s Uber Eats over the city’s cap on the amount meal-delivery services can collect from restaurants, a federal judge ruled.

The companies properly laid out their allegations that a 15% cap put in place under the law interferes with their right to freely negotiate contracts, US District Judge Gregory Woods ruled Tuesday in Manhattan, denying the city’s motion to dismiss the suit. The delivery apps argue that the cap will likely result in higher prices for consumers and lower earnings for restaurants and drivers.

The New York City Council originally instituted the fee limit in May 2020 on a temporary basis. Councilors said it was necessary to protect restaurants struggling during the Covid pandemic from high commissions charged by the delivery apps. The council made the cap permanent in August 2021.

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