Prohibits third-party food delivery services from charging a food service establishment a delivery fee that totals more than a certain percent of the total purchase price of an online order.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2411
SPONSOR: Fahy TITLE OF BILL:
An act to amend the general business law, in relation to third-party
food delivery service charges
PURPOSE:
The purpose of this bill is to cap the permissible fees third-party food
delivery services may charge to restaurants for delivery services.
SUMMARY OF PROVISIONS:
Section 1 (1) adds new section 391-v of the general business law, which
sets definitions of terms.(2) Establishes that no third-party food
delivery service shall charge a food service establishment a delivery
fee that totals more than fifteen percent of the purchase price of each
online order, and that no third-party delivery service shall charge any
fee other than a delivery fee for the use of their service.(3) Sets
terms for penalties for violations of this section.
Section 2 is the effective date.
JUSTIFICATION:
During the COVID-19 pandemic, third-party food delivery services have
become a critical component of the business model for many New York
restaurants. While this relationship has been beneficial for many
restaurants, the fees charged by these third-party delivery services
have significantly cut into the profits margin of these already-strug-
gling businesses.
These fees can typically range between 20-40% of any order's cost, with
fees towards the higher end of that range significantly cutting into the
ability of restaurateurs to turns a profit. With 90% of restaurants in
New York City unable to pay full rent in September, and the economic
picture not looking much better for these businesses statewide, New York
must follow these lead of cities like New York City, Denver and Tucson
to balance this relationship.
LEGISLATIVE HISTORY:
A11158 2019-20
STATE AND LOCAL FISCAL IMPLICATIONS:
TO BE DETERMINED.
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law. Effective immediately, the addition, amendment and/or
repeal of any rule or regulation necessary for the implementation of
this act on its effective date are authorized to be made and completed
on or before such effective date.
