A package of legislation that could drastically alter the restaurant scene is set for a public hearing this week.
On April 29, Councilman Mark Gjonaj, chair of the small business committee, will present eight bills to the council. Chief of Staff Reginald Johnson explained that four third-party companies, Uber Eats, DoorDash, Grubhub and Postmates, control the restaurant sector in NYC. He noted that while they are not profitable business models, they do make a chunk of change off the restaurants.
“We think that these bills will go a long way to help level the playing field,” he said. “The idea that four companies have that much control begs the larger issue that there needs to be some type of oversight.”
The package includes proposals to create oversight in the packaging of food for deliveries, the disclosure of fees and commissions to consumers that are imposed on participating restaurants, licensing on third party deliveries, the prohibition of erroneous telephone order fees, the display of health inspection grades online, capping fees charged by third party delivery services, prohibition of third-party delivery services from limiting the menu prices restaurants may charge on food and beverage orders and businesses to disclose information about how gratuities are provided to their delivery workers in connection with online orders of goods.
These bills were introduced in February and the hope is that they are passed by May or June, Johnson said. He explained that not having a cap on fees hurts businesses, but especially now during the COVID crisis.
“We’re not trying to hurt their [Uber Eats and Grubhub] business,” he said. “It is our point of view that someone needs to stand up for the local restaurants.”
This bill would prohibit third-party food delivery services from charging restaurants more than a 10 percent fee per order for the use of their service. During a declared emergency, when a state of emergency is in effect in the city and restaurants are prohibited from offering food for consumption on-premises, third-party food delivery services would be limited to charging restaurants delivery fees only, up to a total of 10 percent per order. All other types of fees, such as advertising or processing fees, would be prohibited.
According to Johnson, there has been support among council members to pass the bills, but they also anticipate opposition and testimony from the third party delivery companies.
He noted that big companies like McDonalds and Burger King can handle the fees, but the small pizzerias and delis can’t. Johnson told the Bronx Times that he always gets calls from business owners complaining about the fees, but during the epidemic they have increased.
Johnson explained the legislation has spread nationwide since it was introduced it. Cities like Chicago are looking to cap fees at five percent and San Francisco ordered a temporary cap during the crisis.
“The people that need to be protected here are the restaurant owners,” Johnson stressed.
