Bills in City Council could protect restaurants from ‘exorbitant’ fees by delivery apps

City Council passed three bills on Thursday that will extend the cap on delivery fees levied from third-party apps that likely kill business for local eateries in New York City as indoor dining still is not allowed by the state.

One bill sponsored by Councilman Francisco Moya, Intro. 2054, will mean apps for ordering in cannot charge restaurants a “pass-through,” or processing fee, that charges more than the cost of fulfilling the order until 90 days after indoor dining is deemed safe for the public in the ongoing COVID-19 pandemic. A package of other bills could compliment this by providing other protections from apps as well as commercial rent assistance.

“This bill will provide our neighborhood mom and pop restaurants a temporary reprieve from the exorbitant fees charged by billion-dollar tech companies for as long as the pandemic prevents them from operating at full indoor capacity,” Moya said. “It’s a bit of breathing room they desperately need. We’re all thankful to see the city’s positivity rate slow down but restaurants are well aware that we haven’t outrun COVID-19 yet. They know the industry will be reeling from the pandemic’s effects for months to come. As legislators, we can and must make sure that they’re not grappling with exorbitant fees from these third-party food apps while they’re struggling to keep their shops on life support.”

A second bill by Councilman Mark Gjonaj, Intro. 2043, will prohibit third-party apps from charging restaurants for phone calls that do not end in a transaction, both of which would take effect immediately after passage.

Both bills passed 44-3, with only Brooklyn Councilman Kalman Yeger and Staten Island Councilmen Joe Borelli and Steven Matteo opposing it.

Councilman Mark Levine’s bill (Intro. 1470-B) would codify the Commercial Lease Assistance Program, operated by the Department of Small Business Services (SBS), that offers out-of-court legal assistances for eateries and other brick and mortars to negotiate commercial lease renewals. According to Levine, this would essentially give business the right to an attorney, at least before proprietors go to court.

“Our city’s small businesses are facing extinction. We need to do everything possible to help them in their fight for survival,” Levine said. “Expanding access to counsel for our residential tenants has had a dramatic impact. We need to build on this success by expanding legal assistance for commercial tenants as well.”

The CLA program went unfunded in the Fiscal Year 2021 budget which was passed in July, but funds have since been restored, according to City Council.

Levine’s bill passed the City Council unanimously.

All three bills were sent to Mayor Bill de Blasio for his signature.