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City Council Passes Temporary Cap on Delivery Fees, Queens Chamber Applauds Bill

Uber Eats Delivery (Stock)

May 14, 2020 By Christian Murray

The Queens Chamber of Commerce applauded the city council yesterday for passing legislation that would put a temporary cap on the commission that third-party delivery services are allow to charge restaurants during state emergencies such as COVID-19.

The bill restricts commission fees charged by apps at 20 percent during any state of emergency–and 90 days following. The bill is largely targeted toward app companies such as Grubhub and Uber Eats

“We applaud the council for taking the important first step of capping the fees online platforms can charge,” said Tom Grech, CEO of the Queens Chamber of Commerce. “Our restaurants have been devastated by this public health and economic crisis and if we fail to act many of the 25,000 restaurants in New York City, including 6,000 in Queens, will close their doors for good.”

The legislation, sponsored by Council Member Francisco Moya, comes at a time when restaurants are struggling since they were ordered closed on March 17—except for takeout and delivery.

The third-party delivery services are able to charge fees as high as 40 percent of the revenue.

The legislation prohibits ordering apps from charging more than 15 percent commission on deliveries and more than 5 percent for all other charges, including credit card processing.

The caps would go into effect whenever there is a state of emergency.

Companies in breech of the legislation would face penalties of $1,000 per restaurant per day.

The mayor indicated at his daily press briefing Tuesday that he backed the legislation.

“I think it’s smart legislation so I will support it,” de Blasio said.

Grech said that the legislation would aid small businesses as they look to bounce back from the crisis.

“This will be a great help to restaurant owners struggling to make ends meet,” Grech said. “We thank Council Speaker Corey Johnson, and council members Mark Gjonaj and Francisco Moya for their leadership on this issue.”

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