Business

Food delivery apps already violating Big Apple fee cap

Lookout Grubhub and Uber Eats, you’re under scrutiny by NYC lawmakers — again.

The NYC Councilman behind a measure to limit the fees food delivery apps can charge restaurants during the pandemic is now demanding the city agency in charge of enforcing the law seek out violators and slap them with hefty fines.

The demand emerged Thursday when Christian Klossner, executive director of Mayor De Blasio’s Office of Special Enforcement, revealed at a hearing that it’s received at least two complaints about overcharges since the city cracked down on delivery fees in May.

Klossner said an unnamed delivery app appear to have charged one restaurant a 10-percent commission for a pickup food order — or more than twice the rate permitted by legislation intended to help struggling eateries survive the pandemic. In another instance, an app charged a credit card processing fees that exceeded what’s allowed.

“The company that charged 10 percent for a pick up has agreed to refund it,” Klossner said when asked what OSE was doing to rectify the first situation.

But that didn’t sit well with NYC Councilman Mark Gjonaj, who heads up the small business committee that drew up the legislation. He demanded OSE consider fining the offending company — and raised concerns that the practice might be widespread.

“If these companies have done it to one restaurant, it must be widespread,” Gjonai said at the hearing. “You would not know that this is a problem unless you are told by restaurants? How are you getting the word out to the thousands of businesses that they need to bring this to your attention?”

The hearing was called over plans to extend the legislation, which has capped at 5 percent the fees apps can charge Big Apple restaurants for pick-up orders made through their technology. Fees for food deliveries are limited to 15 percent.

Klossner’s testimony was followed by two restaurateurs — Andrew Ding of The Expat and George Constantinou of four restaurants including Bogota Latin Bistro — who said they continue to be charged fees for calls through Grubhub’s app that never resulted in orders, which is also banned.

Grubhub declined to comment but in written testimony its spokeswoman Amy Healy said Grubhub — which owns Seamless — has been unfairly penalized by the cap. Healy’s testimony also said the cap has also hurt restaurants through a 13-percent decrease in orders for independent restaurants.

Not so, said the four restaurant owners who testified, including Evan Franco of Brookyn Crepe & Juice, who said that he has already saved $7,500 in fees from Grubhub.

“We need long term caps,” he said.

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