New York City capped food delivery app fees to help restaurants survive the COVID-19 pandemic, and it’s keeping those limits in place as the recovery begins. Gothamist reports the City Council has passed a bill that extends caps on delivery app fees until February 17th, 2022. The limits were due to expire in August and kept fees no higher than 15 percent for deliveries, plus 5 percent for other services. Apps could have charged up to 35 percent without the fee ceiling.
Queens Council Member Francisco Moya claimed a return to higher fees would “completely” hobble businesses just starting to recover from the pandemic.
Other bills passed at the same time require apps to get written approval before listing businesses and to share customer data with restaurants. Delivery services have faced criticism, lawsuits and legislation after listing restaurants in their apps without permission.
The app creators have opposed New York City’s new measures. GrubHub claimed the caps were “arbitrary price controls” that would allegedly damage businesses and the economy. DoorDash, meanwhile, suggested that data sharing with restaurants should be opt-in rather than enabled by default. The company was determined to “protect the privacy” of users, a spokesperson said.
The companies haven’t been completely opposed to reduced fees. DoorDash, GrubHub, Uber Eats and others started cutting and waiving some fees as the pandemic began. Their concern, as you might guess, is that these caps might become permanent and restrict the apps’ long-term viability. It’s not an unfounded fear — San Francisco’s Board of Supervisors recently voted to permanently cap delivery app fees in the city.
At the same time, there’s little doubt that restaurants are eager to avoid a return to pre-pandemic fees. Some eateries were only reluctantly listing themselves in these apps due to the large fees, and in many cases have offered incentives to customers who order directly. While NYC’s extension won’t necessarily ensure a given restaurant’s survival, it could help that restaurant maintain familiar profits or keep prices in check.
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