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New York extends food delivery app fee limits until February 2022

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To help restaurants weather the COVID-19 pandemic, New York has imposed a food delivery app fee cap and is keeping those restrictions in place while recovery begins. Gothamist reports The city council passed a law that expands until February 17, 2022. The limits were due to expire in August, with shipping fees not exceeding 15 percent, plus 5 percent for other services. Without limitation, application fees could be charged up to 35 percent.

Queens Council member Francisco Moya said the return to higher tariffs “completely” would make it difficult for businesses just starting to recover from the pandemic.

Other bills passed at the same time require apps to get written permission before listing companies and share customer data with restaurants. Delivery services have faced criticism, claims and legislation after including restaurants in their apps without permission.

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The creators of the app have spoken out against New York’s new measures. GrubHub argued that the restrictions were “arbitrary price controls” that would harm businesses and the economy. DoorDash, meanwhile, suggested that sharing data with restaurants should be allowed rather than enabled by default. According to a company spokesman, the company was determined to “protect the privacy” of users.

Companies weren’t totally against the cut in commissions. DoorDash, GrubHub, Uber Eats and others began to lower and cancel some fees as the pandemic began. As you might have guessed, their concern is that these restrictions could become permanent and limit the long-term viability of applications. This is a legitimate concern – San Francisco Supervisory Board recently voted permanently limit city shipping charges.

At the same time, there is no doubt that restaurants are keen to avoid returning to pre-pandemic tariffs. Some eateries were reluctant to be included in these applications due to high fees, and in many cases proposed incentives for customers who order directly. While New York City’s expansion does not necessarily guarantee the survival of a given restaurant, it can help that restaurant maintain profit margins or keep prices in check.

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