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01/08/2021

More Cities, States Take Aim at Third-Party Delivery

As the COVID-19 pandemic continues, state and city governments are taking aim at third-party delivery fees.

In New Jersey, a statewide cap of 20% expired December 31. City councilors in Jersey City wasted no time in taking up the matter. On January 4, the Jersey City city council instituted a 10% cap on third-party delivery fees until the end of the pandemic, reports NJ.com. Other cities have enacted measures. In Minneapolis, the mayor issued an emergency regulation to cap third-party delivery fees at 15%, reports the Minneapolis/St. Paul Business Journal. The Baltimore County, Maryland, executive slapped down a 15% cap last month, reported the Baltimore Sun

Meanwhile in Massachusetts, the state legislature voted on January 6 to cap third-party delivery fees at 15%. The law applies to restaurants with fewer than 20 locations and will remain in effect during the COVID-19 pandemic, reports the Boston Business Journal.

Third-party delivery marketplaces provide increased reach and marketing power for brands big and small. However third-party delivery fees are increasingly under fire as many restaurants, with dining rooms closed, are depending on off-prem to survive. Chicago, Philadelphia, Portland, Ore., San Francisco, New York and Seattle are among the cities that moved in 2020 to cap third-party delivery fees, at least temporarily during the pandemic.

Authorized Deliveries

new bill introduced in the New York state legislature would prevent food delivery apps from listing restaurants without their written permission.

The legislation, which is sponsored by Assemblyman John McDonald III and Manhattan State Senator Brad Hoylman, is similar to a law that just went into effect in California and would fine the apps $500 each day a restaurant is listed after requesting to be removed, reports The Gothamist.

On January 1, California’s law, the Fair Food Delivery Act, went into effect, and requires delivery platforms to get authorization from restaurants before listing them and their menus on their marketplaces. The move comes as California’s stay-at-home orders have been extended in parts of the state.   

Just last month after working with restaurants and third-party delivery companies, the National Restaurant Association issued Public Policy Principles for Third-Party Delivery that define best practices for third-party delivery to guide lawmakers in developing public policy.