Thursday, July 18, 2019

Pressure builds to regulate 3rd party deliverers

New York is looking to cap the commissions charged full-service restaurants by third-party deliverers at 10% as part of a mounting pushback against the services’ controversial business practices. Simultaneously, the New York City councilman who held hearings on the services in late June, has asked the attorney general of New York to investigate Grubhub for alleged violations of state anti-trust regulations...
The SLA spokesman said the agency is weighing whether that cap should also apply to third-party deliverers, since they, too, collect a portion of sales from the restaurants they service. The agency could alternatively require that the services negotiate their inclusion on the liquor licenses of every full-service establishment whose meals they deliver, a logistical and virtually impossible feat.
Any rule change by the SLA would not affect Grubhub, the service's spokesperson said. "It is important to understand that the New York State Liquor Authority (SLA) does not have jurisdiction over the sale of food," he said. "With respect to the sale of alcohol, which represents an incidental portion of orders on our platform, Grubhub operates in full compliance with the 2017 Declaratory Ruling" an agreement that specifies the service will not charge more than 10% of the profits from alcoholic beverages as a commission. "To our knowledge, we are the only third-party national delivery provider in possession of such a ruling from the SLA."
Delivery by third parties such as Grubhub, DoorDash, Uber Eats and Postmates has been the fastest-growing segment of the restaurant industry, but operators have complained that the services’ aggressive fees eat up all the profits. Chains such as Olive Garden and Del Frisco’s have refused to offer small-order delivery because of concerns about the profitability. Read more here

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