Council Passes Restaurant Relief Bills, Will Cap Delivery Fees

NEW YORK, NY — A package of bills passed by the New York City Council Wednesday will help the city's restaurants survive the coronavirus crisis and come back strong when restrictions on dining in can be safely lifted, lawmakers and restaurant industry members said.

Bills approved by the council Wednesday will set caps on third-party delivery fees, prevent delivery services from charging restaurants for simple phone calls, waive sidewalk cafe fees and prevent commercial landlords from harassing restaurants impacted by coronavirus or holding restaurant owners personally liable for unpaid rent. The legislation will give business owners relief as many operate on a limited basis — or have been forced to close — in accordance with the state's stay-at-home order, Andrew Rigie, Executive Director of the New York City Hospitality Alliance, said Wednesday.

"We need to do everything as a city to protect our beloved restaurants, bars and nightclubs and ensure that they have the support they need to one day they can reopen, and we can rebuild our economy and get back to doing what New York does so, so well," Rigie said during a virtual press conference.

New York City restaurants have been limited to takeout and delivery orders since March 16 in an effort to cut down on new coronavirus infections. The same order forced businesses such as bars, nightclubs and movie theaters to shut down. Third-party delivery services such as Grubhub, Seamless and Uber Eats help restaurants find customers, but take as much as 30% of the total order price. The fees can leave restaurants with little profit and can even result in businesses losing money on an order, Rigie said.

A bill proposed by City Councilmember Francisco Moya will cap the fees at 5% for simple order transmissions and 15% if the third party also executes the delivery. Harlem restaurant owner Melba Wilson said Wednesday that capping fees could allow her to return some of her employees — who she considers an extended family — from furlough.

"Delivery fees being 30% were killing my business, they were killing so many small businesses. When I look at the fact that they're being capped at hopefully 15% that allows me to not just feed my community — a community that I'm born in, that I'm raised in and that I so dearly love — but to also hopefully bring back some of my employees," Wilson said.

A second bill related to third-party delivery fees would prevent the services from charging businesses for phone calls that do not result in orders. Rigie said Wednesday that businesses are currently being charged when customers use the delivery services to call businesses to ask simple questions about a menu item's price or ingredients.

The bills will go into effect on a temporary basis during the duration of emergency orders and an additional 90 days, according to the legislation. Supporters may push for more permeant caps on third-party delivery fees in the future. Rigie described the fees as a "crisis before the crisis" that threatened to close restaurants before coronavirus was a problem. Delivery services will be fined $1000 per restaurant per day for fee overcharges.

Restaurant owners who may be forced to close their businesses will also be protected from being forced to dip into their savings to satisfy clauses in commercial leases. A bill proposed by City Councilmember Carlina Rivera prohibits landlords from holding business owners from enforcing personal liability clauses in commercial leases.

West Village Restaurateur Gabriel Stulman of Happy Cooking Hospitality compared guiding his businesses through the coronavirus crisis to a boxing match.

"I got into this business not thinking I was never going to get hit. I imagined I was going to get hit. It's a matter of can I take the punch and keep going through it... But what I need to know is that if I give it a shot, and we can't make it, my landlord can't wave a contract that I signed 10 or 11 years ago in my face and say 'guess what Gabe, after I'm done cleaning the bank account of your business out I'm not done there," Stulman said.

City Council Speaker Corey Johnson said Wednesday morning that he expected the bills to be passed by the council during its stated meeting that day. Each bill passed with a vast majority of the votes needed. Only a handful of City Council members voted against each bill, with Republican lawmakers Joe Borelli and Steven Matteo of Staten Island being the only councilmembers to vote no on the entire package.

"We have to do everything we can to ensure that these small businesses, and industry-wide, we do not see these places going under. Our restaurants are a part of our identity as New Yorkers," Johnson said Wednesday.

New York Mayor Bill de Blasio, who will need to sign the bills into law, said Tuesday that he will support the "smart" legislation on third-party delivery fees. The mayor has not announced support for the remaining bills in the package.