Council Introduces Amendment Permanently Capping Delivery Fees from Restaurants

NEW YORK, NY (11/03/2022) (readMedia)-- Today, Council Member Bob Holden, Council Member Marjorie Velázquez, and 12 other co-sponsors today introduced a bill (Int. No. 813) that would make permanent existing protections for New York City restaurants regarding the use of third-party delivery apps, while expanding marketing options restaurants can choose from to reach new customers. This pragmatic bill would amend and strengthen a 2020 local law that capped fees charged by third-party delivery apps at the beginning of the Covid-19 pandemic as many restaurants shifted to delivery.

While rightfully protecting the restaurant industry from unfair charges, that 2020 bill also unintentionally restricted them from choosing to pay more to third-party marketing and delivery companies for additional services, significantly limiting options for restaurants that lack the dedicated marketing teams and big budgets of national brands. This needed change will allow small and medium-sized restaurants, especially New York City's family and immigrant-owned businesses, to opt into services that boost their exposure so they can better compete.

"Intro 813 will build on the previous Council's work to protect our restaurant industry while ensuring small businesses, including those in my own District, can thrive as they continue to recover from the COVID-19 pandemic," said Chair of the Committee on Consumer and Worker Protection, Council Member Velázquez. "We must provide our businesses with the necessary tools to succeed, and by supporting common-sense legislation that lifts arbitrary rules on restaurants, this Council will provide that opportunity.

"Our restaurants, especially the many small, immigrant owned ones in Queens, deserve the chance the compete with big chains," said Council Member Holden. "Market controls that limit options have unintended consequences on what stores stay open, often boosting chain restaurants over small businesses. Intro 0813 will correct this and let restaurants thrive. I would like to thank the Consumer and Worker Protection Committee Chair, Marjorie Velázquez and all the other Council Members who are cosponsoring this legislation with me today. I look forward to working with key stakeholders and voting this legislation into law."

"When it comes to feeding themselves, customers have almost unlimited options in New York City, which means that for small independent restaurants like mine, the competitive landscape is intense and we must do everything we can to get in front of new eyes and into new bellies," said Dawn Kelly, CEO of The Nourish Spot, a health food restaurant in Jamaica, Queens. "It's not as simple as taking out an ad in the community paper anymore, and we don't have the big budgets and expert staff to run sophisticated campaigns to put our brand in front of new audiences. That's why delivery app platforms have been such a strong business partner for my restaurant. Their services not only helped us expand our reach to new customers - which yielded a significant increase in our online orders - but helped us better understand how to position our mission-driven brand to serve healthy meals. We are now nourishing a much larger community in Southeast Queens and across New York City."

"We support the Holden / Velasquez amendment, which would provide greater flexibility to businesses without undermining the fee cap on third-party delivery apps," said Jessica Walker, President and CEO of the Manhattan Chamber of Commerce. "More than ever, restaurants and retail shops need to be able to compete in the digital marketplace so we should not limit the marketing opportunities that may be a smart investment for some of them."

"Business marketing is one of the most powerful tools we have in the business development toolbox," said Lisa Sorin, President of The Bronx Chamber of Commerce. "The Holden / Velazquez amendment modifying the commission structure third party delivery apps may charge allows businesses to freely receive and pay for enhanced marketing and visibility, increasing competition and allowing businesses to reach a broader audience. It is a common sense amendment that allows businesses to deploy revenue to better their businesses and has The Bronx Chamber's full support."

"As the most diverse borough in New York City, Queens' identity and appeal is inextricably tied to its small restaurants. In today's hyper-competitive environment, they must go well beyond their immediate neighborhoods to attract new customers," said Thomas J. Grech, President & Chief Executive Officer at Queens Chamber of Commerce. "But they need the right tools and flexibility in order to be successful at this. That's exactly what this amendment seeks to achieve, by giving independent, family- and immigrant owned establishments the option to decide what's best for them in growing their businesses - which is good for workers and the economy."

"It is incredibly important that NYC area restaurants, many of them diverse-owned, including LGBTQ-owned, have the flexibility to meet their marketing and outreach efforts as businesses continue to recover from the pandemic. We are proud to support this legislation," said Justin G. Nelson, Co-Founder & President, National LGBT Chamber of Commerce (NGLCC).

Earlier this year, San Francisco lawmakers passed legislation that expanded and clearly defined restaurants' marketing services options rights. San Francisco's change followed a legal challenge in federal court to a marketing cap imposed in that city identical to the one imposed in New York. Following legislative compromise, the lawsuit against the city was dropped. A similar lawsuit is pending in New York's district court.