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NYC caps restaurant delivery app service fees during COVID-19:
Third-party food delivery services like Grubhub, DoorDash and Postmates operating in New York City won't be allowed to charge restaurants more than 20 percent commission on orders during states of emergency like the coronavirus pandemic, according to a bill passed by New York City Council members on Wednesday. These apps can charge restaurants fees of more than 30 percent per order, cutting into profits at a time when COVID-19 has shut their doors except for takeout and delivery orders.
The legislation restricts fees charged by third-party food delivery services during states of emergency when restaurants are prohibited from serving customers in-house, and for 90 days afterward. During these periods, the services can only charge up to 15% per order for providing delivery services, and no more than a 5% fee per order for other types of charges (like credit card processing and marketing).
Violations of the law could mean fines up to $1,000 per restaurant per day for the delivery services.
[Editors Note: fixed typo 14May07:20 to "no more than"]--JR]
(Score: 0) by Anonymous Coward on Thursday May 14 2020, @05:59PM
You obviously don't live in NYC. It's not the "delivery" service that's at issue, as many (if not most) delis, inexpensive mom & pop restaurants and the like generally have (or had, the usurious, rent-seeking fees charged by these apps/services have forced many restaurants to close) their own delivery people.
The issue is that the exploitative contracts (think ISPs) "offered" by these services (I'm looking at you, Grubhub/Seamless, Deivery.com, etc.) require restaurants to charge the same price whether in person or through these services -- despite the fact that these "services" (basically a website and credit card processing) charge up to %30 on every single order -- delivery services cost extra on top of that.
What's more, these scumbags post their own phone numbers on their (often fake representation that they are the restaurant directly, not the service) websites and forward them to the restaurants, charging the restaurants (30%) for orders which don't even use their services -- like cash orders made over the phone and delivered by employees of the restaurant.
Yes, I do realize that things work differently in other places in the US. However, this is happening in NYC, and NYC is taking action, not the rest of the country.
An apt analogy (sorry, no cars) would be Visa and Mastercard charging 30% fees on every transaction. How long would your local gas station stay in business if every time someone used a credit/debit card, 30% of the charge went to VISA/MC and the gas station was forbidden by their contract to charge more for the use of VISA/MC?
That's the situation with these scumbags. And they use all manner of trickery and misdirection to increase their take -- charging restaurants even when they have no part in transactions/orders.
tl;dr: These "services" are destroying valuable community resources and economic engines, as many mom & pop restaurants' profit margins are less than 30%. Actually, there are few businesses whose profit margins even approach that.