A bill has been passed by the New York City Council designed to help struggling restaurant owners navigate large third-party delivery fees, with provisions that cap third-party delivery commissions at 5 percent (plus 15 percent if restaurants are using the third-party delivery drivers) up until and for 90 days after the statewide lockdown has been lifted.
Violations of the delivery fee caps would be subject to civil penalties of up to USD$1,000 per restaurant per day. The other parts of the legislation package include similar efforts to help small businesses navigate this new normal, from forgiving sidewalk café franchise fees, to protecting small business owners from personal liability clauses in commercial leases.
The bill, which was supported by New York City mayor Bill de Blasio, was originally debated by the council last month. The bill was passed by the City Council’s Small Business Committee and was passed in full.
The new bill, aimed at protecting small businesses, is not widely supported by third-party delivery companies. A GrubHub spokesperson called the bill “exactly the wrong proposal.”
“Any arbitrary cap, regardless of the duration, will lower order volume to locally-owned restaurants, increase costs for small business owners, and raise costs on customers. Delivery workers would have fewer work opportunities and lower earnings,” a GrubHub spokesperson said.
“We also believe that any cap on fees represents an overstep by local officials and will not withstand a legal challenge.”
Chicago has taken a different approach to this issue, and has passed a bill that requires third party food delivery companies to provide customers with itemised receipts, breaking down all charges including taxes, delivery fees, and what restaurants are required to pay in commissions. The bill is aimed at providing transparency rather than fiscally limiting third-party services.
