The New York City Council passed a bill which caps the amount that food delivery apps such as Grubhub, DoorDash, and Uber Eats can charge a restaurant at 15 percent. Originally, this was a temporary measure to provide relief for restaurants during the Covid-19 pandemic, but the new legislation makes the cap permanent. The Council also passed a bill requiring most third-party delivery companies to be licensed.
The bill to cap fees; “adds a new section in the subchapter added by Proposed Introduction 1897-A, prohibiting third-party food delivery services from charging food service establishments more than 15 percent per order for delivery and more than 5 percent per order for all other fees, except for transaction fees. The bill would prohibit third-party food delivery services from charging more than 3 per order for transaction fees, except that it would allow for a higher charge if the third-party food delivery service can provide proof that such higher charge was imposed upon the service by a credit card company or internet-based payment system to the Department of Consumer and Worker Protection and the relevant food service establishment if requested. This bill would also require the Department to submit a report to the Mayor and the Speaker of the Council every two years, beginning no later than September 30, 2023, recommending the maintenance or adjustment of this bill’s cap on fees, by looking at factors such as the effect of the cap on third-party food delivery services and food service establishments; whether the cap affects delivery workers’ wages and working conditions; the products provided by third-party food delivery services for listing, processing and marketing; and figures related to the bill’s subchapter such as the number of complaints and violations, total amount of penalties imposed and the amount of restitution recovered.”
The NYC Hospitality Alliance came out in support of these measures. Unsurprisingly the app-based firms are not. Speaking of the app-based firms, they were dealt another blow recently with a California judge ruling that Prop 22 is unconstitutional.