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New law would cap fees food delivery services could charge local restaurants

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Posted at 10:52 AM, Dec 04, 2020
and last updated 2020-12-04 10:52:54-05

BUFFALO, N.Y. (WKBW) — A group of Erie County Legislators have introduced a local law that would cap the fees food delivery services such as Uber Eats, GrubHub and DoorDash can charge local restaurants during a declared emergency like COVID-19.

Erie County Legislators Joe Lorigo, Ed Rath, Frank Todaro and John Mills introduced the law. They say the Orange Zone restrictions in Erie County impact hundreds of restaurants that can only offer takeout and use these services for delivery despite the high fees associated with them.

The law would prohibit the third-party delivery services from charging a delivery fee that totals more than 15% of the price of the order and cap other service fees at 5% of the total order.

Legislator Lorigo said:

“This year has been a nightmare for small businesses, including restaurants and other dining establishments. Months of COVID-19-related closures have forced these businesses to turn to takeout orders as their only source of revenue. Unfortunately, third-party delivery services are extremely costly for restaurants to use. This needs to change. The law I am proposing would limit the fees these companies are allowed to charge during a time of emergency such as the one we are faced with now. I believe we need to do anything we can to help the struggling local restaurant industry and this is one way to put money back into small business owners’ pockets where it belongs.”

Officials say New York's Westchester County has enacted similar legislation with positive feedback and similar legislation was introduced in Ontario, Canada in November.

If approved, the law would end the cap 90 days after a state of emergency has ended. You can find a copy of the proposed law here.