County Board Passes Legislation to Limit Third-Party Fees on Take Out Orders

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To protect local restaurants and consumers during the COVID-19 pandemic, the Westchester County Board of Legislators passed a measure that caps the fees third-party delivery services — like Grubhub, Uber Eats, Doordash and others — can tack on to the purchase price of online orders.

The measure passed the Board Monday night by a vote of 15-1.

Legislator Catherine Parker, the legislation’s chief sponsor and co-chair of the Westchester County Reopening Task Force, said the relief comes just in time.

Parker said, “With occupancy restrictions limiting how many customers our local restaurants can serve on premises, takeout orders have become essential. That will be even more true this fall and winter when outdoor dining may be less practical.  These fees, which mom and pop restaurants don’t have the market power to negotiate, drive up costs to customers – who also are relying on takeout delivery like never before — and can really impair a restaurant’s ability to compete. This legislation will give restaurants and consumers protection during times of emergency so they can sustain themselves now and thrive in the future.”

John Ravitz, Executive Vice President of the Business Council of Westchester, said, “The Business Council of Westchester wants to thank Legislator Parker and the Board of Legislators for understanding that outside-of-the-box solutions to help small businesses have to be a priority in these times. This legislation, although temporary, will give relief to restaurants which are doing everything in their power to stay open and to keep their workers employed.”

During the COVID-19 pandemic, many restaurants have come to rely on these third-party food delivery services. These services charge commission fees based on the purchase price of the food orders. Agreements between the services and restaurants vary, but all include delivery commission fees of up to 30% or more.  The legislation passed Monday night caps those delivery fees at 15%.  It also caps other service fees the companies might charge at 5%, making the all-inclusive cap 20% total. The caps do not cover fees charged by credit card companies that may be passed through by the delivery services.

The legislation is similar to legislation passed in May in New York City. It also prohibits the service companies from complying with the fee caps by reducing compensation rates paid to drivers or by garnishing their tips.

The legislation only would apply during a declared emergency and would end 90 days after the end of the emergency declaration.

Louie Lanza of Hudson Hospitality Group and co-chair of the Westchester County Reopening Task Force, said, “This legislation could very well provide the sales-boost incentive restaurants need to be able to remain open this winter versus closing until spring or maybe for good.”

Casey Egan, owner of Emma’s Ale House in White Plains and President of the Westchester chapter of the New York Restaurant Association said, “This is a real positive thing for the industry in Westchester. We appreciate the hard work the Board has done to provide some shelter for us in the storm coming for restaurants this winter.”