Technology

Survey shows strong restaurant support for NYC delivery fee cap

Nine out of 10 restaurants say they need the cap in order to remain profitable, according to a study by the New York City Hospitality Alliance.
NYC restaurant
Many New York restaurants say they're happy with the current 20% delivery fee cap. | Photo: Shutterstock

The vast majority of New York City restaurants say they need the city’s 20% cap on third-party delivery fees to stay in place in order to remain profitable.

That’s according to a new survey by the New York City Hospitality Alliance (NYCHA), an organization that advocates for Big Apple restaurants and nightclubs. 

The group canvassed 431 restaurants about the city’s delivery fee cap, which has been debated for months as the City Council decides whether to ease the restrictions.

The cap currently limits delivery commissions to 15% of the order total and all other non-transaction charges to 5%. A proposed amendment would keep the 15% delivery charge but would allow restaurants to pay up to an additional 15% for marketing services.

Ninety-two percent of the restaurants surveyed by NYCHA favor the existing rule; in fact, they said it’s necessary for them to remain profitable. 

About three-fourths of restaurants said they want the cap to remain as-is. And the 24% that do want it changed said the fees should be lowered rather than raised, according to NYCHA.

Additionally, 60% of respondents said they’ve had an average experience with their delivery providers. Twenty-one percent have had a negative experience and 19% said the experience has been good. 

Seven in 10 use one or more of the major services: Grubhub, DoorDash and Uber Eats.

“New York City's fee cap law is of paramount importance to restaurants in neighborhoods across the five boroughs,” said Andrew Rigie, executive director of NYCHA, in a statement. “By capping the exorbitant fees charged by third-party delivery apps, this law works to level the playing field and ensure that local restaurants can continue to serve their communities without being burdened by unfair costs.”

Third-party delivery apps have been leading the charge to loosen the cap, arguing that giving restaurants the option to pay more for marketing is good because it allows restaurants to drive more sales.

In March, Grubhub published a list of 500 New York City restaurants that had voiced their support for the amendment. 

The bill is still awaiting approval from the nine-person Committee on Consumer and Workforce Protection, which is working on a report that will analyze the fee cap and help determine whether it should remain in place. 

The NYCHA said it would submit the findings from its survey to the committee.

If the bill advances, it will then need 26 yay votes from the 51-member Council to move on to the mayor’s desk. It’s currently co-signed by 25 members.

New York City has been at the forefront of efforts to rein in delivery companies over the past three years. In addition to the fee cap, it has created legislation that would force delivery companies to share more data with restaurants. And earlier this month, it instituted a $17.96 minimum wage for third-party delivery workers.

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