NYC Restaurant Owners Brace for Potential 43% Delivery App Fees

The New York City Council is currently reviewing a bill, Int 762, that could significantly alter the financial landscape for restaurants utilizing third-party delivery apps. The proposed legislation would allow apps like DoorDash, Uber Eats, and Grubhub to charge total commissions of up to 43% per order, a considerable increase from the current 23% cap.

Marketing Fees at the Center of Debate

The most significant change under the proposed bill would impact marketing fees, potentially raising the current 5% cap to a maximum of 25%. This increase would allow restaurants to purchase additional visibility on the apps, potentially boosting their reach and competitiveness. However, this has sparked concerns about the financial burden on smaller businesses and the possibility of those unable to afford the higher fees being overshadowed.

Differing Perspectives on the Bill

Delivery apps have voiced support for the bill, highlighting the potential benefits for restaurants in terms of flexibility and growth opportunities. However, restaurant advocates like the New York City Hospitality Alliance have raised concerns about the bill's potential negative impact on small businesses. They argue that the increased fees could unfairly burden smaller establishments and create an uneven playing field.

New York City: A Unique Landscape for Delivery Fees

New York City currently stands alone as the only city in the United States with permanent restrictions on delivery app fees. The proposed 43% ceiling in the bill even exceeds the typical charges in other markets, where a tiered model maxing out at 30% is the norm. This makes the bill a pivotal point in the ongoing debate over fair compensation and the impact of delivery apps on local businesses.

The Path Forward

The bill, currently sponsored by 20 of the city's 51 Council members, requires 26 votes to pass. As it progresses through the legislative process, the outcome of this debate will undoubtedly shape the future relationship between restaurants and delivery apps in New York City.

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