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New York City Council votes to cap fees charged by GrubHub, others during COVID-19

If the mayor signs off, delivery apps won't be able to charge restaurants more than 20 percent per order during states of emergency like the coronavirus pandemic.

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Alison DeNisco Rayome Managing Editor
Managing Editor Alison DeNisco Rayome joined CNET in 2019, and is a member of the Home team. She is a co-lead of the CNET Tips and We Do the Math series, and manages the Home Tips series, testing out new hacks for cooking, cleaning and tinkering with all of the gadgets and appliances in your house. Alison was previously an editor at TechRepublic.
Expertise Home Tips, including cooking, cleaning and appliances hacks Credentials
  • National Silver Azbee Award for Impact/Investigative Journalism; National Gold Azbee Award for Online Single Topic Coverage by a Team; National Bronze Azbee Award for Web Feature Series
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Alison DeNisco Rayome
2 min read
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Several cities are giving restaurants a break when it to comes to delivery fees.

 Getty Images

Under a bill passed Wednesday by the New York City Council, third-party food delivery services in New York, like Grubhub, DoorDash and Postmates, wouldn't be allowed to charge restaurants more than a 20 percent commission on orders during states of emergency like the coronavirus pandemic. Currently, the apps can charge restaurants fees of more than 30 percent per order, cutting into profits at a time when COVID-19 has shut the doors of eating places except for takeout and delivery orders.

The bill now moves to New York City Mayor Bill de Blasio's desk to sign. De Blasio said in a Tuesday press conference that he supports the bill.

The legislation would restrict fees charged by third-party food delivery services during states of emergency when restaurants are prohibited from serving customers in-house, and for 90 days afterward. During these periods, the services could charge only up to 15% per order for providing delivery services, and no more than a 5% fee per order for other types of charges, like credit card processing and marketing.

Read more: Best food delivery service: DoorDash, Grubhub, Uber Eats and more compared

Violations of the law could mean fines of up to $1,000 per restaurant per day for the delivery services.  

"This is one where we want to make sure people are treated fairly," de Blasio said during the Tuesday press conference. "And they saw something that wasn't fair to everyday people going through so much, and I think it's smart legislation, so I will support it."

Other cities, including Jersey City, Washington, DC, Seattle and San Francisco have also capped third-party delivery service fees as a result of the pandemic.

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Watch this: Food delivery services during the pandemic