Big Apple legislators are about to take a stab at regulating food delivery giants like Grubhub and UberEats.
The New York City Council on Thursday will be presented with a package of six bills aimed at reducing the fees food delivery apps can charge city restaurants to 10 percent, down from as much as 30 percent. The proposed bills would also require the companies behind these apps to apply for licenses to operate here.
The bills are the product of nearly a year of oversight hearings and investigations into the industry’s practices by the City Council’s Small Business Committee amid complaints by eateries that companies like Grubhub have been systematically overbilling them.
Mark Gjonaj (D-Bronx), who heads up the council’s small business committee and sponsored all six bills, insists this is about saving city restaurants that have been left vulnerable to questionable practices by food ordering apps run by multibillion-dollar tech companies.
“This is not about destroying an industry or fighting against technology,” Gjonaj said. “We are not being heavy-handed. But we should get ahead of things and not wait for 27,000 restaurants to be destroyed before we act.”
Delivery companies like Grubhub have come under intense scrutiny over the past year amid a growing torrent of complaints by diners and restaurants alike. Companies like DoorDash, for example, have been blasted for hiring violent delivery workers, while Grubhub has been caught charging bogus fees — an issue The Post broke last year when restaurants began noticing that they were being billed for telephone calls that never resulted in orders.
In fact, one of the bills to be presented to the City Council on Thursday addresses that practice specifically and states that “no delivery service may charge a commission for a telephone order that does not result in an actual transaction.”
Another bill demands restaurants provide packaging that will let consumers know if a delivery worker sampled their food before dropping it off — also a hot button issue.
The legislation, which is expected to result in hearings as soon as April, could significantly hamper delivery companies’ revenues at a time when companies like Grubhub, which owns delivery company Seamless, are facing heated competition from monied backers like Uber and Google.
As The Post has previously reported, the New York State Liquor Authority is also considering a 10 percent cap on the fees delivery companies can charge restaurants that have a liquor license.
In a sign of what’s to come, the delivery industry has been fighting tooth and nail to derail the NYSLA regulation, including hiring lobbyists and consultants to pressure Albany legislators.
“This arbitrary cap defies common sense,” Grubhub said of the city’s proposed bills. “If you tell New York restaurants that they can only sell pizza for a quarter and coffee for a nickel, no one will serve pizza or coffee. Simply put, this bill will slash business to mom and pop restaurants and hurt consumers in the process.”
The bill that calls for app companies to be licensed would place them under the authority of the city’s Department of Consumer Affairs, which would be able to revoke, suspend of refuse to issue a license to any company that “engages in misleading advertising or deceptive trade practices,” according to the bill.
The license “gives us greater ability in making sure there is a price to be paid when a bad actor comes into this city,” Gjonaj told The Post.
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