Grubhub proposes to overturn New York’s pandemic fee-limiting law — it’s suing the city

Grubhub is quietly lobbying New York lawmakers to change legislation that limits the fees food delivery companies charge restaurants for takeout orders — even as it sues the city to overturn the fee cap, The Post reports publication.

The delivery giant said it supported 17 city council members — mostly in contentious hearings in 2019 on multiple issues related to payments between the city and food delivery apps. new members who did not participate.

On Nov. 3, lawmakers including Marjorie Velazquez (D-Bronx), Eric Dinovitz (D-Bronx) and Vicki Paladino (R-Queens) sponsored a proposed amendment that would allow delivery companies to charge more for their services . 15% of the current limit.

The change extends the current 5% cap on all other charges, including marketing, while maintaining the 15% cap on delivery charges.

Soon after, Grubhub sent a letter to community groups seeking support for the amendment, according to a lobbyist representing the delivery business reviewed by The Post.

“As business returns to normal, the New York City Council must be aware that the well-intentioned emergency decisions made during the height of the COVID-19 pandemic have run their course and are now poised to hurt the very small businesses they built . help first,” Adam Witkowski, who works at lobbying firm Court Street Strategies, wrote in a Nov. 16 letter.

Doordash, Grubhub and UberEats are suing New York City over a fee cap in 2021 that limits the amount they can charge restaurants to 15 percent of a takeout order.
UCG/Universal Images Group via G

The letter also says that a “campaign” involving restaurants will soon begin.

“We’re asking community organizations to write to the City Council asking for more flexibility for independent restaurants to qualify for third-party delivery teams,” the letter said.

Grubhub and other food delivery apps, including Doordash and UberEats, sued New York City last year over a 2020 bill that would limit their fees to 15 percent of food orders. claims it was “an act of government overreach.” ” The complaint also found that the restriction cost them “hundreds of millions of dollars” in lost revenue.

The city has filed a motion to dismiss the complaint, and a court is expected to rule on the matter early next year, according to sources familiar with the situation. A hearing has not been set on the proposed amendment.

The app companies argued that the ban would hurt independent restaurants because they would not be able to pay delivery companies more to advertise and market their businesses.

Grubhub delivery man travels in Manhattan.
Grubhub says more than 50 restaurants are supporting the proposed amendment to loosen the delivery fee cap.

“By removing the fee cap, independent restaurants can once again have access to many marketing services,” Witkowski’s letter said.

But restaurants want the fee restrictions to remain in place, according to a trade group representing thousands of restaurants and community groups in the city.

“Limiting fees for third-party delivery services has been a huge boon to independent restaurants in New York. “In talking to those we’ve worked with, we haven’t heard any interest in lifting that restriction,” said Valerie White, senior executive director of the Local Initiatives Support Corporation, which received Witkowski’s Nov. 16 letter.

Other community groups, such as LISC, also received the letter, which did not identify Witkowski’s ties to Grubhub, they said. According to The Post’s sources, Witkowski identified himself as a Grubhub representative after being asked who he worked for.

Witkowski did not return a call for comment, and Grubhub did not comment on the letter.

“I think there’s a lot of misinformation being spread out there and that’s it [Grubhub] The campaign shows that there is a grassroots campaign to allow delivery companies to charge more, and that’s wrong,” said Andrew Riggi, executive director of the NYC Hospitality Alliance, a trade group that represents the restaurant industry.

Rigi also points out that many of the city lawmakers who support the amendment are too green to know about the city’s poor relationship with supply companies.

“They don’t understand how third-party delivery companies take advantage of restaurants because they haven’t sat through hours of city council hearings and read articles about how delivery companies are hurting small businesses in their district,” Riggi said.

In 2019, City Council Small Business Chair Mark Gionage opened a series of public hearings about the industry’s business practices, including, as first reported by The Post, fraudulently charging restaurants and forcing restaurants to work with them if they don’t want to. spent Whether or not to create websites that list restaurants for ordering on their platforms.

A Grubhub spokeswoman said about 50 restaurants support the amendment and have sent a letter to the city council.

“This bill will be especially beneficial to immigrant and family-owned small businesses that may not have access to the same marketing resources as larger brands,” Grubhub spokeswoman Lisa Dee said in a statement.

“We need to provide our businesses with the tools they need to succeed, and by supporting common sense laws that eliminate arbitrary regulations in restaurants, this board will provide that opportunity,” said the consumer and workers’ rights activist. Velazquez, chairman of the defense committee. press release.


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