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Julie Menin explains proposed changes to food delivery service fee caps
0:01:34
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3 min
Council Member Julie Menin, chair of the Committee on Consumer and Worker Protection, provides an opening statement on proposed introduction 762-B. She explains the bill's purpose to amend the 2021 local law on fee caps for third-party food delivery services, allowing for increased fees for enhanced services while maintaining protections for restaurants.
- The bill aims to balance the interests of delivery services and restaurants
- It includes measures to protect restaurants from potential negative impacts
- The legislation provides more marketing opportunities and flexibility for restaurants while maintaining basic service fee caps
Julie Menin
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Good morning.
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My name is Julie Menon, chair of the Committee on Consumer and Worker Protection.
0:01:39
Apologies in advance.
0:01:40
I have laryngitis, but hopefully you'll be able to hear me.
0:01:44
Thank you for joining us for today's vote on proposed intro seven sixty two b.
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First of all, I want to recognize my colleagues who are here, council member Osei, council member Obrayo, council member Salamanca, majority leader Farias, council member Krishnan, and we'll acknowledge additional colleagues as they join.
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In 2021, this council passed a local law to permanently cap the fees third party food delivery services could charge restaurants.
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That cap protects restaurants from exorbitant fees imposed by delivery services, which was critical during the pandemic and continues to be vital to this day.
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Proposed introduction seven sixty two b sponsored by council member Salamanca would amend this local law by allowing third party delivery services to increase their fees for restaurants that choose to pay more for enhanced services.
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An earlier version of this bill was heard in June 2024.
0:02:41
At that hearing, the committee heard from the Department of Consumer and Worker Protection, third party delivery services, restaurants, and other stakeholders.
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The stakeholder feedback informed the amendments made to the bill that is before this committee today.
0:02:57
Since introduction, this bill has been amended in order to strike the right balance between the interests of the delivery services seeking to expand the services that they offer their customer and restaurants who are financially burdened by high delivery fees.
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We have learned lessons from other cities like Washington DC that amended or repealed their fee caps following the COVID nineteen pandemic without incorporating protections for restaurants.
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This bill would protect restaurants that choose not to pay higher fees from experiencing reduced visibility on the delivery apps or reduced access to basic services.
0:03:35
To be clear, this bill does not eliminate the cap on fees that delivery services can charge restaurants.
0:03:42
Instead, this bill would increase the amount that restaurants can charge for enhanced services by 20%.
0:03:49
It would only permit charging for enhanced services however if the delivery service also offers the option to purchase a basic service at a cost that is no higher than the current fee limits.
0:04:03
The current fee limits per order are 15% for delivery, 3% for credit card processing, and 5% for any other service fee.
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The basic service would include the option for delivery and pickup and it would require restaurants to be listed discoverable on the third party platform.
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The delivery service would be prohibited from omitting a restaurant that chooses a basic service from their search functionalities.
0:04:29
This bill aims to address some of the so called Washington DC issues by establishing guaranteed delivery within a one mile radius and including all participating restaurants in a search by name or by other customer criteria like cuisine type or location.
0:04:45
Proposed introduction seven sixty two b also includes additional protections for restaurants.
0:04:51
This bill would restrict delivery services from purchasing the name of a restaurant for purposes of internet advertising and it would allow restaurants to include marketing materials in the orders placed through the delivery service.
0:05:05
This bill has been thoughtfully amended to address the issues raised by restaurants.
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I will now turn it over to council member Salamanca to make an opening statement about his bill.