Restaurant Relief Bills, Will Cap Delivery Fees

A package of bills passed by the New York City Council Wednesday will help the city’s restaurants survive the coronavirus crisis and come back strong when restrictions on dining in can be safely lifted, lawmakers, and restaurant industry members said.

Bills approved by the council Wednesday will set caps on third-party delivery fees, prevent delivery services from charging restaurants for simple phone calls, waive sidewalk cafe fees and prevent commercial landlords from harassing restaurants impacted by coronavirus or holding restaurant owners personally liable for unpaid rent. The legislation will give business owners relief as many operate on a limited basis — or have been forced to close — in accordance with the state’s stay-at-home order.

New York City restaurants have been limited to takeout and delivery orders since March 16 in an effort to cut down on new coronavirus infections. The same order forced businesses such as bars, nightclubs, and movie theaters to shut down. Third-party delivery services such as Grubhub, Seamless, and Uber Eats help restaurants find customers, but take as much as 30% of the total order price. The fees can leave restaurants with little profit and can even result in businesses losing money on an order.

A bill proposed by City Councilmember Francisco Moya will cap the fees at 5% for simple order transmissions and 15% if the third party also executes the delivery.

A second bill related to third-party delivery fees would prevent the services from charging businesses for phone calls that do not result in orders. Businesses are currently being charged when customers use the delivery services to call businesses to ask simple questions about a menu item’s price or ingredients.

The bills will go into effect on a temporary basis during the duration of emergency orders and an additional 90 days, according to the legislation. Supporters may push for more permeant caps on third-party delivery fees in the future. Delivery services will be fined $1000 per restaurant per day for fee overcharges.

Restaurant owners who may be forced to close their businesses will also be protected from being forced to dip into their savings to satisfy clauses in commercial leases. A bill proposed by City Councilmember Carlina Rivera prohibits landlords from holding business owners from enforcing personal liability clauses in commercial leases.

 

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