NYC Council agrees to cap Grubhub, UberEats fees during pandemic
The New York City Council compared food ordering apps like Grubhub and UberEats to blood-sucking parasites on Wednesday before passing emergency legislation aimed at helping struggling restaurants lower their delivery costs during the pandemic.
During the state of emergency caused by the coronavirus, food ordering and delivery apps will not be allowed to charge restaurants more than 15 percent in delivery fees and 5 percent for any other takeout order fees.
The city council will also ban these apps from charging restaurants for telephone calls that never resulted in a food order — a practice Grubhub came under fire for last year following exclusive reporting by The Post.
During a hearing that preceded the vote on Wednesday, councilman Francisco Moya, who represents Jackson Heights and Corona, compared Grubhbub to a “leech” that is “sucking the life and blood out of restaurants.”
Food ordering and delivery apps like Grubhub can charge restaurants commissions that can range from 12 to 40 percent of a single order.
Grubhub, which is reportedly an acquisition target by Uber, has threatened legal action against the city council over the legislation, which it has slammed as an “overstep.”
City Council Speaker Corey Johnson discounted such threats.
“We do believe we have the legal authority,” he said. “We’ve spent a lot of time looking at these issues. So I believe we’re on solid legal grounds and I’m not concerned about this challenge.”
Councilman Justin Brandon said he thinks the new rules will actually help food ordering and delivery apps get more business.
“It’s a very, very fair bill. It’s going to help a lot of restaurants, and I think, actually it’s going to create more business for our restaurants and for our delivery workers because the lower fees will actually get more of the restaurants to use these apps,” Brandon said.
Three other bills were passed that prevent commercial landlords from going after the personal assets of small-business owners affected by COVID-19, and to protect them against harassment. Another bill suspends sidewalk cafe fees.
As The Post reported Tuesday, Mayor Bill de Blasio has said he supports the legislation and is expected to sign it into law. The new rules will remain in effect for 90 days past the state of emergency lifting.
“What we’re doing today is helping these small businesses survive this crisis,” said Councilman Mark Gjonaj, who sponsored the bills and has been critical of food delivery company fees in the past.
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