New York City restaurant and bar operators are praising Mayor de Blasio for signing a package of urgently needed legislation, championed by Speaker Corey Johnson and leaders in the New York City Council, that will help the hospitality industry survive the COVID-19 pandemic.
Mayor de Blasio’s signature on this legislative package caps 3rd-party delivery platform fees at 5 percent and delivery fees at 15 percent, penalizes bogus telephone fees charged by these platforms for calls that don’t result in orders, forgives 2020 sidewalk café franchise fees, and protects commercial tenants from personal liability clauses in leases.
With 3rd-party delivery platforms like GrubHub and Seamless exploiting restaurants forced to operate as takeout and delivery-only during the crisis with fees as high as 30 percent, this legislation became a priority in cities across the country. New York City now joins Washington D.C., Seattle, Jersey City, and San Francisco in capping 3rd-party delivery platforms’ fees.
The NYC Hospitality Alliance has been a leading voice for the industry advocating for this legislation and was invited by the de Blasio Administration to join the bill-signing.
“There’s been many difficult days for New York City’s restaurants and bars since March 15,” says Andrew Rigie, NYC Hospitality Alliance executive director. “Today, Mayor de Blasio, Speaker Johnson, Councilmembers Gjonaj, Moya, Rivera, Adams and Cohen, and all the supporters of this legislation extended a glimmer of hope to thousands of restaurants across the five boroughs. We’ll continue to fight for the future of the New York City restaurant and nightlife industry, which must be at the core of our city’s economic and social recovery.”
The legislation regulating 3rd-party delivery platforms goes into effect seven days from Tuesday (May 26), and the other bills are enacted immediately.
This package of legislation signed into law today includes:
PERSONAL LIABILITY IN COMMERCIAL LEASES (Int. No. 1932-A) & TENANT HARASSMENT (Int. No. 1914-A)
Landlords will be blocked from enforcing personal liability clauses in leases for commercial tenants who default because of a government order to close indoor eating and drinking operations during the emergency, if the default occurs between March 7 and September 30, 2020. It will also be unlawful to threaten a commercial tenant based on their status as a business affected by COVID-19 or the tenant’s receipt of a rent concession during the Covid-19 emergency.
CAPPING THIRD PARTY DELIVERY SERVICES (Int. No. 1908-B)
During the emergency and for 90 days after, third-party delivery platforms cannot charge more than 5 percent of an order. If the company is also handling the actual delivery, they can charge an additional 15 percent for the delivery itself.
TELEPHONE ORDERS (Int. No. 1898-A)
During the emergency and 90 days thereafter, there will be a fine of up to $500 for each time a third-party delivery platform charges a business for a “telephone order” that did not actually result in an actual transaction during that call.
SIDEWALK CAFE FRANCHISE FEES (Int. No. 1916-A)
The rent paid by restaurants to the City for the use of the sidewalk for a sidewalk cafe (called franchise fees), generally cost restaurants thousands of dollars. These fees will be forgiven for the rest of the year. Rent for unenclosed cafes will not start again until March 1, 2021, and for enclosed cafes, when the emergency order for restaurants is lifted.