Community, Lead Stories

Board moves to cap delivery service fees on takeout

To protect local restaurants and consumers during the COVID-19 pandemic, the Westchester County Board of Legislators passed a measure that caps
the fees third-party delivery services—like Grubhub, Uber Eats, Doordash and others—can tack on to the purchase price of online orders.

The measure passed the board on Monday, Oct. 19, by a vote of 15-1.

County Legislator Catherine Parker, the legislation’s chief sponsor and co-chair of the Westchester County Reopening Task Force says the relief comes just
in time.

“With occupancy restrictions limiting how many customers our local restaurants can serve on premises, takeout orders have become essential,” Parker said.
“That will be even more true this fall and winter when outdoor dining may be less practical.  These fees, which mom and pop restaurants don’t have the market power to negotiate, drive up costs to customers—who also are relying on takeout delivery like never before—and can really impair a restaurant’s ability to compete.  This legislation will give restaurants and consumers protection during times of emergency so they can sustain themselves now and thrive in the future.”

During the COVID-19 pandemic, many restaurants have come to rely on these third-party food delivery services.  These services charge commission fees
based on the purchase price of the food orders.  Agreements between the services and restaurants vary, but all include delivery commission fees of up to
30% or more.  The legislation passed Monday night caps those delivery fees at 15%. It also caps other service fees the companies might charge at 5%, making the all-inclusive cap 20% total.  The caps do not cover fees charged by credit card companies that may be passed through by the delivery services.

“This is a real positive thing for the industry in Westchester,” said Casey Egan, owner of Emma’s Ale House in White Plains.  “We appreciate the hard work the
Board has done to provide some shelter in the storm coming for restaurants this winter.”  The legislation is similar to legislation passed in May in New
York City.  It also prohibits the service companies from complying with the fee caps by reducing compensation rates paid to drivers or by garnishing their tips.

The legislation only would apply during a declared emergency and would end 90 days after the end of the emergency declaration.  “This legislation could very
well provide the sales-boost incentive restaurants need to be able to remain open this winter versus closing until spring or maybe for good,” said Louie
Lanza of the Hudson Hospitality Group and co-chair of the county Reopening Task Force.
(Submitted)