NYC OKs Delivery Fee Caps

The New York City Council doesn’t want to let food delivery apps charge restaurants too much for delivery fees, as it voted to put a cap on the fees.

On Wednesday (May 13), the Council voted to cap fees from the apps for restaurants at 15 percent.

The law still needs to be signed by Mayor Bill de Blasio, who signaled his agreement with the policy at a press conference but had not signed it yet as of May 13.

The law is intended to provide relief to restaurants suffering during the pandemic as they’re not allowed to provide 100 percent of dining services inside for risk of infections.

Other types of charges will be capped at 5 percent. Violators will be fined $1,000 per day if they charge higher fines during the lockdown period and for 90 days after lockdowns have expired, according to the bill.

The bill is a bone thrown to restaurants in New York City that have always criticized the policies of apps like GrubHub and Uber Eats that charged them weighty fines for delivery. The pandemic only compounded the problem as the restaurants can’t make money at the levels they used to. Several that never used to work on the apps have been forced to sign up to make any money at all — and were still subject to the fines.

Similar versions of the restrictions have been tried across the U.S. in San Francisco, Seattle, Washington D.C., Jersey City and Chicago to provide more transparency in what everyone was paying for these services. But in response to the restrictions imposed in San Francisco, Uber Eats said it would be ending services for the Treasure Island neighborhood, which didn’t have as many food options to begin with compared to surrounding suburbs.

The app-based delivery ecosystem could see a shakeup if Uber acquires GrubHub, as detailed in an offer by the former this week. Uber owned around 20 percent of the U.S. meal delivery market as of late last year, while GrubHub owned 30 percent of it.