COUNCIL DELIVERS
City to limit fees order-in apps charge restaurants
The Big Apple’s struggling restaurants are about to get some relief on food-delivery costs as hungry New Yorkers increasingly order in during the coronavirus crisis.
The City Council is expected to pass emergency legislation on Wednesday that will cap the commission fees that delivery apps charge restaurants at 20 percent during any government-ordered state of emergency, The Post has learned.
That’s well below the fees that delivery apps like Uber Eats, Grubhub and Grubhub’s Seamless app are currently charging restaurants, which can swell to a third of the total bill, according to sources familiar with the legislation.
Still, the 20 percent emergency cap is also well above the stringent, 10 percent cap that the council had previously proposed. Officials said the cap is being raised to allow for delivery costs, including insuring workers. Meanwhile, the State Liquor Authority is still weighing a possible 10 percent cap on delivery fees for all restaurants that hold a liquor license, sources said.
Council members will likewise introduce a second bill that’s aimed squarely at Grubhub, which has come under fire for charging restaurants up to $9 for telephone calls that never resulted in take-out orders.
The bill would ban this practice — which The Post first exposed a year ago — adding a hefty $500 penalty for violations.
Council’s small business committee along with Sen. Chuck Schumer (D-NY) had previously advised Grubhub to end the practice, which it did not.
Grubhub further angered public officials at the beginning of the pandemic when it touted a misleading program to absorb $100 million in commissions to help small, independent restaurants during the crisis. After reading the fine print, restaurant owners discovered that Grubhub was not waiving those fees but simply deferring them.
Mayor de Blasio signaled on Tuesday that he supports the proposed emergency regulations.
I do support that legislation,” the mayor said during a press briefing, adding, “I want to thank the City Council. They’ve been really, I think, focused in a good smart way. This is one where we want to make sure people are treated fairly.”
Specifically, the commission cap will limit the app companies, which also include DoorDash, Postmates and others, from charging restaurants more than 15 percent per order for delivery and ordering services and no more than a 5 percent charge for all other types of charges, including marketing and creditcard processing fees. Violations would be subject to civil penalties of up to $1,000 per restaurant per day.
The bills enjoy wide support in the council, according to sources. They would remain in effect during a declared state of emergency by government officials and for 90 days thereafter.
“Our city’s local restaurant sector cannot be allowed to go under,” said City Councilman Mark Gjonaj. “During this unprecedented public health crisis, many are struggling just to stay afloat. These two bills will go a long way toward creating a fairer playing field that could mean the difference between remaining open or closing their doors and laying off their employees.”
Grubhub, for its part, questioned the City Council’s legal authority to cap fees describing the effort in a statement as as “overstep.” “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.”