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DoorDash, Grubhub, Uber Eats sue NYC for trying to permanently cap delivery fees • The Register

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Three of biggest US food delivery outfits – DoorDash, Uber Eats, and Grubhub – have sued New York City to stop it enforcing a limit on the fees they can extract from restaurants.

In May 2020, the city temporarily ordered food delivery apps to charge restaurants no more than about 20 per cent of each order total to deliver takeout – 15 per cent for the actual deliveries, five per cent for being listed in the app, plus payment processing fees. The’s city order was set to end in 90 days though it was later extended until February 2022.

A bill passed by the city in August this year, however, proposed making this cap permanent. It has yet to be signed into effect by Mayor Bill de Blasio. Now, in an attempt to block the bill, all three tech companies jointly filed a lawsuit [PDF] against New York City in federal court on Thursday. The trio are seeking an injunction to stop the proposal from being passed.

New York City councilors believe the bill better supports restaurants and their patrons. But DoorDash, Uber Eats, and Grubhub believe it is unconstitutional and will harm businesses and their customers.

“The ordinance is unconstitutional because, among other things, it interferes with freely negotiated contracts between platforms and restaurants by changing and dictating the economic terms on which a dynamic industry operates,” according to the complaint.

Representatives from Grubhub and DoorDash told The Register the bill may lead to an increase in delivery fees for customers, making the whole experience more expensive for hungry New Yorkers.

Don’t forget: these app companies charge the restaurant and the customer for each order, so if the delivery giants can’t make the eateries pay more, the punters will have to cough up the difference. Those folks will then be less likely to order from restaurants, and, in turn, those businesses will make less money.

“Not only do price controls violate the US and New York Constitutions, but they will likely harm the very restaurants the city purports to support,” a spokesperson for DoorDash told us.

“In addition, price controls can lead to higher prices for consumers, which can reduce orders and earnings for Dashers. Imposing permanent price controls is an unprecedented and dangerous overreach by the government and will limit the options small businesses rely on to compete in an increasingly competitive market.”

“Grubhub has worked hard during the pandemic to support restaurants in New York City and across the country,” a Grubhub spokesperson told us.

“Despite our best efforts, the city council recently passed an unprecedented and unconstitutional price control targeting the food delivery industry. Price controls increase delivery fees for consumers, and therefore lead to a reduction of orders for both restaurants and couriers. While Grubhub remains willing to engage with the city council, we unfortunately are left with no choice but to take legal action.”

A similar bill was passed in San Francisco, and the companies also sued that city in federal court in July, according to SF Chronicle. Mayor London Breed indicated she didn’t want to sign off on the law, and it passed without her signature.

Uber, New York City Council, and Mayor de Blasio’s office were not immediately available for comment. ®

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UK competition watchdog unveils advice for antivirus firms • The Register

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The UK’s Competition and Markets Authority (CMA) has unveiled compliance principles to curb locally some of the sharper auto-renewal practices of antivirus software firms.

The move follows the watchdog baring its teeth at McAfee and Norton over the issue of automatically renewing contracts.

The CMA took exception to auto-renewal contracts for antivirus software that customers in the UK signed up for and found difficult to cancel. Refunds and clearer pricing information (including making sure consumers were aware that year two could well end up considerably costlier than the first) were the order of the day.

Today’s principles build on that work, and are aimed at helping antivirus companies toe the line where UK consumer law is concerned. They are a bit more detailed than a simple “stop being horrid.”

The focus remains on auto-renewing contracts, where a customer signs up for a fixed period, then is charged again for subsequent periods. The CMA acknowledges that such arrangements are convenient, but they risk the consumer being locked into an agreement they no longer want or that they get stung with higher fees at renewal time.

While the principles are intended to be helpful, lurking in the background is consumer law and the threat of a potential trip to court for vendors stepping out of line.

First up comes a requirement to make sure customers are informed about auto-renewal, rather than hiding the detail in an End User Licence Agreement (EULA) or burying it in hard-to-read text through which a user must scroll.

Price claims must be “accurate” and “not mislead your customers” – so only show discounts against the normal price. It must also be possible to turn off the auto-renew easily, keep auto-renew turned off once it is off and, if on, make sure customers are reminded in good time that an auto-renew will happen.

Getting a refund must be easier and customers should be able to change their mind when auto-renewal happens. If the customer has stopped using the product, safeguards are needed around auto-renewal.

The last principle could pose a few challenges – how does a vendor become aware that a customer is not using its product? The suggestion from the CMA is to check if software updates are being received rather than simply charging users year after year.

The Register contacted McAfee and Norton for their thoughts on the principles, and will update should the companies respond. ®

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Grocery start-up Gorillas raises nearly $1bn in round led by Delivery Hero

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Just a few months after hitting unicorn status, Gorillas has raised another major round of funding from big-name investors.

German start-up Gorillas has raised nearly $1bn to expand its on-demand grocery delivery business.

The Series C funding round was led by Delivery Hero, the German food and grocery delivery giant that recently took a stake in Deliveroo.

Gorillas also received backing from existing investors including Coatue Management, DST Global and Tencent, as well as new investors G Squared, Alanda Capital, Macquarie Capital, MSA Capital and Thrive Capital.

The fresh funding comes just a few months after the company’s $290m Series B, which brought its valuation to more than $1bn.

Gorillas was founded in Berlin in 2020 by Kağan Sümer and Jörg Kattner, promising grocery deliveries in as little as 10 minutes.

It now operates more than 180 warehouses and has expanded to more than 55 cities in nine countries, including Amsterdam, London, Paris, Madrid, New York and Munich.

The company plans to use the latest funding for its next phase of development. This includes reinforcing its footprint in existing markets and investing in operations, technology and marketing.

“The size of today’s funding round by an extraordinary investment consortium underscores the tremendous market potential that lies ahead of us,” said Sümer, who is CEO of the start-up.

“With Delivery Hero, we have chosen a strong strategic support that is deeply rooted in the global delivery market, and is renowned for having unique experience in sustainably scaling a German company internationally.”

On-demand grocery delivery is a growing area in Europe that’s attracting investor attention.

Swedish start-up Kavall raised $5.8m in August, Czech player Rohlik hit unicorn status after its €100m Series C round in July, and Spain’s Glovo secured a €450m Series F round in April to expand in the grocery market.

Gorillas differentiates itself from other players in the market, such as Deliveroo, by employing its delivery drivers rather than relying on gig workers.

However, as the start-up has scaled rapidly over the past year, it has seen delivery workers protest over working conditions and pay, and been put under the spotlight for its treatment of employees.

Don’t miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic’s digest of need-to-know sci-tech news.

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ICO to step in after schools use facial recognition to speed up lunch queue | Facial recognition

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The Information Commissioner’s Office is to intervene over concerns about the use of facial recognition technology on pupils queueing for lunch in school canteens in the UK.

Nine schools in North Ayrshire began taking payments for school lunches this week by scanning the faces of their pupils, according to a report in the Financial Times. More schools are expected to follow.

The ICO, an independent body set up to uphold information rights in the UK, said it would be contacting North Ayrshire council about the move and urged a “less intrusive” approach where possible.

An ICO spokesperson said organisations using facial recognition technology must comply with data protection law before, during and after its use, adding: “Data protection law provides additional protections for children, and organisations need to carefully consider the necessity and proportionality of collecting biometric data before they do so.

“Organisations should consider using a different approach if the same goal can be achieved in a less intrusive manner. We are aware of the introduction, and will be making inquiries with North Ayrshire council.”

The company supplying the technology claimed it was more Covid-secure than other systems, as it was cashless and contactless, and sped up the lunch queue, cutting the time spent on each transaction to five seconds.

Other types of biometric systems, principally fingerprint scanners, have been used in schools in the UK for years, but campaigners say the use of facial recognition technology is unnecessary.

Silkie Carlo, the director of Big Brother Watch, told the Guardian the campaign group had written to schools using facial recognition systems, setting out their concerns and urging them to stop immediately.

“No child should have to go through border-style identity checks just to get a school meal,” she said. “We are supposed to live in a democracy, not a security state.

“This is highly sensitive, personal data that children should be taught to protect, not to give away on a whim. This biometrics company has refused to disclose who else children’s personal information could be shared with and there are some red flags here for us.”

The technology is being installed in schools in the UK by a company called CRB Cunninghams. David Swanston, its managing director, told the FT: “It’s the fastest way of recognising someone at the till. In a secondary school you have around about a 25-minute period to serve potentially 1,000 pupils. So we need fast throughput at the point of sale.”

Live facial recognition, technology that scans crowds to identify faces, has been challenged by civil rights campaigners because of concerns about consent. CRB Cunninghams said the system being installed in UK schools was different – parents had to give explicit consent and cameras check against encrypted faceprint templates stored on school servers.

A spokesperson for North Ayrshire council said its catering system contracts were coming to a natural end, allowing the introduction of new IT “which makes our service more efficient and enhances the pupil experience using innovative technology”.

They added: “Given the ongoing risks associated with Covid-19, the council is keen to have contactless identification as this provides a safer environment for both pupils and staff. Facial recognition has been assessed as the optimal solution that will meet all our requirements.”

The council said 97% of children or their parents had given consent for the new system.

A Scottish government spokesperson said that local authorities, as data controllers, had a duty to comply with general data protection regulations and that schools must by law adhere to strict guidelines on how they collect, store, record and share personal data.

Hayley Dunn, a business leadership specialist at the Association of School and College Leaders, said: “There would need to be strict privacy and data protection controls on any companies offering this technology.

“Leaders would also have legitimate concerns about the potential for cyber ransomware attacks and the importance of storing information securely, which they would need reassurances around before implementing any new technology.”

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