Monroe County Legislator Rachel Barnhart introduced two separate bills that would help restaurants amid a rise in use of third-party food delivery services, such as Grubhub and DoorDash.
The first bill, The Food Delivery Fairness Act, would not allow third-party food delivery services to list restaurants on their platforms without written authorization. Restaurants do not like this practice, because it deprives them of control over a variety of aspects of their businesses, including quality of service, gratuities, and volume of orders. Some restaurants don’t want to participate in any delivery or takeout services, and others already offer their own in-house delivery services.
“The legislation allows restaurants to operate independently of the food delivery apps and to make important decisions about their businesses,” said Barnhart. Similar legislation recently passed in Albany County.
The second bill would cap what third-party food delivery services can charge restaurants in commission fees. The services often charge restaurants 30 percent or more in commission fees on each order. Highlights of what the bill would do:
- Cap the delivery fee from third-party food delivery services to food service establishments at 15 percent of the purchase price for each online order.
- Prohibit third-party food delivery services from restricting what restaurants can charge on their platforms.
- Should restaurants want additional marketing services, they must enter into a separate contract with third-party food delivery services. The third-party food delivery services are prohibited from pressuring restaurants to enter such contracts.
- Prohibit third-party food delivery services from reducing the compensation rate paid to a delivery service driver or garnish gratuities in order to comply with the fee caps.
A now-expired emergency order issued by County Executive Adam Bello that capped what the platforms could charge in commissions saved many individual restaurants thousands of dollars.
Three major third-party delivery services – DoorDash, Uber Eats and GrubHub – control 95 percent of the multi-billion dollar food delivery service market in the U.S. The market dominance of only a few players means small, independent restaurants have little negotiating power. Restaurants are forced to adapt their business models to the third-party delivery services or risk losing customers.
“This relationship is exploitative. These delivery apps are using their dominant market position to set high prices for small, family-owned businesses, extracting wealth from our community,” said Barnhart.
The two proposed local laws will go before the Legislature’s Agenda Charter Committee on Monday.