Popular online food delivery platform DoorDash filed a lawsuit against New York City over a new data-sharing law. Earlier this summer, the City Council approved a bill that would require delivery companies to share customer data with restaurants. The law will come into effect in December 2021.
DoorDash says the law could lead to misuse of customer data, as it does not contain proper restrictions or data security guidelines. Additionally, mandatory data sharing would force the company to modify its services, which will negatively affect both restaurants and customers.
New York City government representatives say the law puts the customer first and gives them greater control over their information.
Mandatory Data Sharing With Restaurants
In July, the New York City Council approved a bill requiring food delivery companies to share customer data with their restaurant partners. The data includes information such as names, phone numbers, emails, and delivery addresses. DoorDash has vehemently opposed the bill, calling it “unconstitutional and undermining of New York City resident’s privacy.”
On Wednesday, 15 September, DoorDash filed a lawsuit against New York City over this new law, seeking an injunction against it, as well as unspecified monetary damages and a jury trial. The law is set to take effect in December this year unless there is any court action.
No Data Security Guidelines
A key ground of DoorDash’s complaint is that the law could put customer data at risk. This is because the bill contains “virtually no restrictions” on what restaurants can do with the information. Furthermore, it does not provide any guidelines for data security.
DoorDash argues that customers trust the company with their sensitive data, and would not feel the same towards “small businesses that do not have similar robust data safety and security protocols.” It added that customers who dine-in usually do not expect to give out their personal information to restaurants.
New York City councilor Keith Powers, who introduced the legislation, said that the law aims to help the city’s restaurant industry that suffered heavily due to the pandemic. Powers added that it gives eateries “better access to customer data and provides strong privacy protections.”
“I encourage DoorDash to drop this lawsuit immediately,” he said.
Need for Greater Privacy Protections
The new data-sharing law aims to provide a level playing field to restaurants and eateries in New York City. These establishments have often tussled with delivery companies over some of their business practices, especially during the rough pandemic year.
Global privacy advocate group the Electronic Frontier Foundation wrote to the New York City Council in July, sympathizing with their goal to help the businesses. However, the group opposed the measure due to its lack of privacy safeguards.
It said that the legislation “sets up a ripe target for hackers and data thieves who want to exploit [the customers’] information.
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