City Council Caps Commission On Third-Party Food Delivery Service

NEW YORK CITY — As the owners of restaurants and other eateries struggle to remain in business during the ongoing coronavirus pandemic, the New York City Council passed a bill Wednesday that will limit the commission third-party delivery services are allowed to charge for getting food to local residents.

A bill passed by the city council now caps delivery charges to 15 percent and limits all other charges to 5 percent per order.

“This will help save NYC restaurants,” Council Speaker Corey Johnson tweeted on Wednesday in announcing the passing of the bill.

The bill limits delivery services like GrubHub and Uber Eats to the 20 perecent commission charge during any state of emergency and 90 days thereafter. Until Wednesday’s vote, delivery services were charging up to 40 percent of revenue at a time when many restaurant owners were forced to lay off staff as eateries have been forced to limit their business to curbside pick up and delivery as the pandemic continues.

Violators of the bill could face civil penalties of $1,000 per restaurant per day.

“Mom and pop restaurants across New York City are being bled dry by billion-dollar tech companies," council member Francisco Moya, the bill's sponsor, said in a statement issued by the city council. "Unfortunately, that relationship isn’t unique to the pandemic. Exorbitant fees from third-party food delivery services threatened restaurants before the COVID-19 outbreak but like so many other issues, this crisis has amplified and expanded that inequity to devastating effects.

"By capping the fees third-party food apps can charge restaurants during declared states of emergency, restaurants can continue providing essential services while not putting themselves out of business in the process."