NYC Council Considers Capping Food Delivery Costs

The measures would limit how much Grubhub and Uber Eats could charge restaurants.

February 28, 2020

NEW YORK—How much should food delivery apps like Uber Eats and Grubhub charge restaurants? That’s the subject of bills before the New York City Council, the New York Times reports.

For nearly 12 months, the City Council has been telling food delivery companies that the way they conduct business is having a detrimental impact on local restaurants. For example, the apps charged restaurants commissions between 15% and 30%, and Grubhub frequently billed eateries for calls that didn’t translate into orders.

Grubhub restructured its ordering system to eliminate wrongful charges and stopped putting up its own website for restaurants that contracted for its service. But the council didn’t think those efforts were enough.

The proposals would put a 10% commission cap on what food delivery apps could charge restaurants and also would mandate that the apps receive a license from the Department of Consumer Affairs, which would give the city power to correct any company violating the rules. Food delivery apps would also be required to let consumers know the commissions and fees for which they bill restaurants.

“David and Goliath is what you have here,” said Mark Gjonaj, who chairs the council’s small business committee and is one of the legislation’s sponsors. “We just want to give the traditional brick-and-mortar, mom-and-pop restaurants a fighting chance.”