Photo: EDwin Martínez / Impremedia
New York is one of the cities in the world where la industria “delivery” Food delivery or delivery has become a vital part of the local economy. And after constant complaints from restaurants that point out even abusive practices of high charges on the part of applications that use their services, the Municipal CouncilHe erased the smile from delivery apps, at least for a time.
Overwhelmingly, the City Council passed the bill known as Intro 2359-A, promoted by the Latino Councilor for Queens, Francisco Moya and Mark Gjonaj, from The Bronx, which extends until February 17, 2022, the limits on the rates that apps charge for their services, which will give a break to restaurants, businesses fiercely hit by the crisis that left the COVID pandemic.
The cap imposed during the pandemic of 15% maximum allowed to charge the apps for deliveries and 5% for other services, which was scheduled to end next month, which in practice would give free rein to the applications to charge commissions as high as 30 to 35%It will be extended by law for six more months.
“For too much time, there has been a power imbalance between these food delivery apps and restaurants. Small businesses should not feel pressured to accept these rates in order to remain viable and competitive, “said Councilor Moya, after the approval of the new law. “We have the opportunity and the responsibility to protect our restaurants so they can survive. Allowing the time limit to expire would hurt the recovery of so many businesses that are just beginning to pick up. “
Andrew Rigie, CEO of NYC Hospitality Alliance, applauded the move of the City Council and assured that it sends a strong message to the app industry that has made millions of dollars at the expense of the high charges it imposes on businesses that use its services.
While the companies that run the food apps obviously opposed the Council’s re-imposed restraints, Rigie noted that those limits put “exploitative business practices of certain large third-party delivery companies on the line”.
Grant Klinzman, spokesperson for the GrubHub company, One of the largest food delivery apps moving in New York, as well as others like UberEats and DoorDash, raised its voice against the law passed by the City Council.
Klinzman said that the limits extended to the provision of their services to restaurants are “arbitrary price controls”, while ensuring that they will have a negative impact on the industry and even on the income of restaurants and workers, something that according to businesses and “deliveries ”Is far from reality, as the demand for food delivery in New York is extremely high.
The GrubHub spokesperson assured that the law “will result in damaging and long-term consequences for local businesses, delivery workers, diners and the local economy ”.
Julio Cardona, who works as a “delivery” for UberEats was happy with the extension of the cost brake to restaurants, but askedl Municipal Council to take more aggressive measures against apps, not only imposing the permanent collection limits beyond February 2022 and passing laws that guarantee wages and benefits to those who deliver food.
“I think that It is time for the Council to show that it values poor people like us who put food on the table of many New Yorkers and stop being afraid of corporations. that in the end without putting anything more than a technological application, and without risking anything, they earn millions everywhere, “said the young Colombian. “The apps don’t pay us insurance, they don’t pay us salaries, they keep a percentage of the restaurants, with another of the deliveries and they even take away tips. It is a legalized robbery that must end ”.
The law also warns that those who do not comply with the rules may face civil penalties of up to $ 1,000 per day for every violation in each restaurant.
Details of the measures approved on food apps
- Intro 2359-A extends until February 17, 2022 the limits to the rates that apps charge for their services
- Until then, 15% will remain the maximum limit that apps will charge for deliveries.
- 5% will be the rope for other services, such as marketing
- 30 to 35% of costs could be charged for apps if the limits had not been extended for six more months
- Another approved bill requires apps to have a restaurant owner’s written approval before including their business in the provision of services.
- It is also noted that apps cannot demand from restaurants any type of compensation for damages that occur after food or drinks leave the restaurant
- Another approved initiative warns that apps must share customer data with restaurants, in order to get to know their customers. This includes name, telephone, address, e-mail and what they order, but they clarify that restaurants are prohibited from selling customer information without their consent.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.