Food delivery apps will face a permanent cap on the fees they can charge restaurants under a bill passed by the New York City Council on Thursday night, causing Grubhub’s stock to and DoorDash take a nosedive
The bill would limit the amount apps can charge restaurants to 15 percent of food orders for delivery services, 5 percent for advertising and other miscellaneous services, and 3 percent for processing fees. credit cards.
If signed into law, the bill would also require food delivery apps to apply for operating licenses, which would be reviewed every two years.
Shares of Grubhub’s parent company Just Eat Takeaway fell 5.6 percent on Friday morning, while DoorDash shares had fallen 2.4 percent, according to MarketWatch data.
Shares of Uber, which has a more diversified business and therefore may be less exposed to the bill, rose about 1 percent.
Mayor Bill de Blasio has 30 days to sign the legislation, which would take effect 120 days after it became law.
The New York City council bill would also require food delivery applications to apply for operating licenses, which would be reviewed every two years.
The bill would make permanent a temporary cap that was first implemented in June 2020 to help restaurants weather the pandemic after many restaurants complained that apps were charging fees of up to 30 percent.
New York law follows a similar permanent cap on shipping rates approved by San Francisco earlier this summer.
Grubhub has also received criticism from politicians and restaurant owners for a controversial telephone delivery system that unfairly charged restaurant owners for orders that were never fulfilled.
Members of the New York City Council had been demanding that Grubhub reimburse all “wrong phone order charges” to restaurants and threatened to “explore legislative solutions if the company does not act.”
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