As the cap on third party deliveries is set to expire in mid-September and the City Council Committee on Small Business hopes to extend it, a major food delivery company is trying to put a stop the cap renewal.
On Aug. 20, Grubhub launched a petition in an attempt to axe the cap and has plans for a paid campaign targeting officials who passed recent reform flaws that have given a lifeline to struggling businesses during COVID-19.
“I am writing to express my strong opposition to the City Council’s proposed food delivery tax,” the petition says. “The COVID-19 pandemic has devastated local restaurants and hurt delivery workers. This new food delivery tax will make things worse: New Yorkers will pay more, local restaurants will receive fewer orders, and delivery workers will earn less. It’s wrong – any way you tax it.”
Councilman Mark Gjonaj, chair of the Small Business Committee, sponsored four bills in May, including two that would cap the amount of commission a third-party delivery service is allowed to charge at 15 percent per order for delivery and 5 percent per order for all other types of charges. Gjonaj was quite angry when he heard that Grubhub was trying to stop the cap on fees.
Gjonaj noted the NYC unemployment rate is 20.4 percent due to COVID-19, but eliminating the third party cap will hurt business and force more to shutter. He explained that two weeks ago, restaurant owners testified how the cap has helped them bring in profits and survive.
“This is a corporate attempt to gaslight New Yorkers and blur the truth,” he said. “Instead of fighting for the ability to gouge restaurants with sky-high, business killing commissions, it would be far more helpful if the economy committed to focusing its energy on helping its restaurant ‘partners; get back on their feet and save their employers jobs. Now is not the time for runaway corporate greed. Grubhub would do well to take the sentiment to heart.”