Furthering efforts to provide relief to small businesses during the COVID-19 shutdown, the governor signed a law on Friday that caps the fees charged by food delivery apps, such as Grubhub, DoorDash and Seamless.
The law caps service fees from delivery companies at 20% of the total bill. However, on orders delivered by the restaurant’s own delivery person, the cap lowers to 10% of the order’s cost.
The bill was passed by the state Assembly earlier this month, 75-1, and signed by Gov. Phil Murphy on Friday.
“It’s a margin killer for many of our Main Street businesses,” Assemblywoman Serena DiMaso said of the app fees. “They’re keeping 32% of the order payment in a restaurant business where margins are maybe 15 or 20%.”
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The cap will remain in effect for the duration of the governor’s state of emergency and will come back into effect during any other emergency that restricts dine-in eating.
“Some of these so-called service fees for food delivery are just way out of line,” said Senator Joe Cryan. “Restaurants have been some of the hardest hit businesses in the shutdown and they face an uphill struggle as we gradually reopen.”