Cap on online food delivery fees proposed in Nassau
Nassau Legis. Joshua Lafazan (I-Woodbury), seen in 2019, introduced the bill to cap fees paid by restaurants using third-party delivery services. Credit: Howard Schnapp
Fees that Nassau restaurants pay to third-party delivery companies such as Uber Eats, Grubhub and Postmates would be capped to 15% of the total order, under a bill filed Wednesday in the Nassau County Legislature.
The revenue cap seeks to stem losses for local restaurants, many of which are experiencing a steep decline in sales during the coronavirus pandemic.
Third-party delivery companies are ubiquitous and often steer customers to order from nearby restaurants. But restaurant owners have complained of having to turn over a big share of their sales take to the popular companies.
Legis. Joshua Lafazan, a Woodbury independent who caucuses with Democrats, said restaurants are suffering during the pandemic, in which fewer customers feel comfortable dining indoors.
"Americans are ordering more takeout than ever before," Lafazan, who introduced the bill, said during a news conference outside the Coach Meeting House in Oyster Bay. "Two very similar industries are experiencing two very different fortunes during COVID-19: Food service delivery apps and restaurants."
"In the middle of a global pandemic, this places restaurants in a vicious Catch-22. Because these apps have 81% of the market share, restaurant owners feel that they need to list their restaurants on these services to gain exposure," Lafazan said.
Grubhub spokesman Grant Klinzman said in a statement: "Fee caps are well-intentioned but counterproductive at a time when restaurants need more support, visibility and order volume than ever. The caps impact how many orders restaurants receive, which drives down pay for drivers by reducing the number of deliveries available. Caps also increase costs for diners and disrupt an essential supply chain of meals. Ultimately, fee caps would cost valuable jobs, tax revenues and important economic activity across Nassau County."
An Uber spokesman did not immediately provide comment.
According to Uber's website, restaurants are subject to a 30% fee for using Uber's delivery staff, or 15% for using their own delivery staff on orders made through the website.
The price "varies by restaurant," Klinzman said. "Restaurants choose the level of service/marketing they receive."
Klinzman also said Grubhub announced a "commission free option ... to make it easier for restaurants to do online ordering through their own digital channels or on-premise properties."
Presiding Officer Richard Nicolello (R-New Hyde Park) did not commit to bringing up the measure for a vote in the Legislature. The chamber is controlled by Republicans.
"We will review the legislation filed today, as we do all bills," Nicolello said. "The Majority will continue to do everything we can to support residents and small business struggling as a result of the pandemic."
A spokesman for Nassau County Executive Laura Curran, a Democrat, said her office would review the bill.
Washington, D.C., Seattle and San Francisco are among the cities that have imposed such fee caps, according to Politico.
Scott Eidler is a deputy editor for the towns department at Newsday. Scott has worked at Newsday since 2012 and previously covered municipal government and education.
