As local restaurants have been forced to close dining rooms and offer takeout only, Erie County Legislator Frank Todaro has introduced a local law that would cap the fees delivery services like Uber Eats, Grub Hub, or Door Dash are able to charge small businesses during a declared emergency such as COVID-19.

The COVID-19 pandemic has forced hundreds of restaurants throughout Erie County to alter their business models and under the current Orange Zone restrictions, dining establishments that wish to stay open are left to rely on takeout orders. Many use third party services for delivery, despite the high fees that are associated with doing business with them. The proposed law would prohibit third-party food delivery services from charging a delivery fee that totals more than 15% of the purchase price of each online order. It would also cap other service fees at 5% of the total order.

Other counties in New York State have enacted similar legislation and received positive feedback (Board moves to cap third party delivery service fees on takeout orders). The same legislation was also introduced in Ontario, Canada in November (Toronto Sun: Ontario government to cap fees on food delivery in lockdown areas). If approved in Erie County, the law would end the cap 90 days after a state of emergency has ended.

Legislator Todaro said, “What we are proposing mirrors legislation that recently passed in Ontario, Canada and in Westchester County. In less than a year, restaurants have had to close, limit capacity, and in most cases, only offer takeout. Our law would help them by limiting the fees third-party apps like UberEats or Grubhub can charge. This would make things a little easier on our struggling restaurant community that badly needs our help right now.”

Brandon Carr, Owner of The Quarter—Buffalo’s New Orleans Kitchen said, “The problem with these 3rd party delivery services are just the rates. They take typically 25-30%. Well standard kitchen profit margins are right around 30%. Plus now you need to factor in the costs of the take out supplies, containers, cups, plastic silverware, etc. You basically don’t make anything from it unless you extremely inflate the costs of your product on their site. Which then can in turn give your restaurant a bad image with guests thinking you’re overpriced. Especially during a shutdown period where we don’t have a dine in service or the alcohol sales to compensate for the lost margins. Right now I believe all 3rd party services should be at 5% and when we’re opened back up no more than 15% especially the first year after re-opening so we have as much chance as possible to recover.”

A copy of the proposed local law can be found here.