For the past 10 months, many people have been relying heavily on food service delivery companies such as Grubhub, DoorDash, and Uber Eats.
However, restaurants say that these companies have been charging them fees of up to 40% at times to deliver their food.
Jason Pierce, owner of Savoy Taproom in Albany says restaurants are already suffering a decline in sales and now are seeing even less money at the end of the day when people order through these delivery services.
“For every dollar you as a customer spent, Grubhub was taking 30 cents, 35 cents, 40 cents,” Pierce explained. “Obviously restaurants couldn’t survive on that.”
Pierce says his restaurant right now is only doing delivery since restaurants have to close by 10 p.m. across the state.
“So 52% of our business is through Grubhub and deliveries, so a reduction of those fees makes it easier to pay the bills,” Pierce emphasized. “Makes it possible for me to maybe even bring back some additional staff we had to lay off.”
The New York State Senate this week passed legislation almost unanimously that would put a 15% cap on these delivery fees and a 5% cap on marketing charges.
This bill would only be in effect until 90 days after the state of emergency ends with the COVID-19 pandemic.
Melissa Fleischut, president of the New York State Restaurant Association, says the next step now is getting it through the State Assembly.
“Some of the restaurants have only been able to operate a few weeks out of 2020 and are still shut down in 2021,” Fleischut explained. “I think everyone is trying to find ways to help restaurants and this is one way the state can get involved that doesn’t cost them any money and isn’t a hit to the state budget.”
A spokesperson for DoorDash sent a statement in response, saying:"DoorDash has always supported restaurants. Pricing regulations could cause us to increase costs for customers, which could lead to fewer orders for local restaurants and fewer earning opportunities for Dashers. Pricing regulations can also remove options available to restaurants by limiting their ability to opt-in to additional services to help their business. We are eager to engage with policymakers on solutions that better support restaurants, customers, and Dashers."
The bill has to pass the state assembly before it becomes law, but several counties such as Albany and Westchester have already passed similar legislation.