JERSEY CITY, NJ - Mayor Steven Fulop issued an executive order Thursday that will cap hidden fees charged to restaurants by third party delivery services during the current COVID-19 state of emergency.
These delivery services have been charging restaurants 15 to 35 percent of a customer’s bill for every online delivery or takeout order made through the website or app, Fulop said. Under the executive order these fees would be capped at 10 percent.
“We have to find ways to protect the economy in which, I believe small businesses are truly the engines that power it,” said Council President Joyce Watterman. “In viewing it as the backbone, we must try and prevent third-party companies from exploiting our restaurants with high fees which ultimately affects them trying to retain their staffing on the payroll.”
Fulop said these fees have been hindering the ability of restaurants to stay fiscally afloat during the current health and economic crisis.
“Many of the restaurants have had to make a shift to relying solely on delivery and takeout under the circumstances, and this cap is our latest effort to identify any available options to provide relief to our local businesses,” Fulop said.
After passing an ordinance on first reading at Wednesday’s City Council meeting, the Executive Order allows the cap to take effect immediately rather than having businesses wait an additional month to become law. The 10 percent cap applies to any website, mobile application, or other third-party service that arranges for the delivery or pickup of food and beverages prepared by a food service establishment.
“This Order will allow local independent restaurants to hold on to more of their hard-earned money, and ensure that local spending stays in the community,” said the owner of Ghost Truck Kitchen, Andrew Martino, who helped bring the issue to the Council’s attention. “Relief from commissions as high as 35 percent is sorely needed now more than ever and will help us keep our doors open serving the neighborhood.”
“In the blink of an eye, they've been forced to upend their businesses models to 100 percent delivery & take-out,” Councilman James Solomon said. “The fees charged by third-party apps - up to 35 percent of an order - is unsustainable. This emergency regulation keeps money in their pockets to pay their employees instead of large, billion-dollar corporations."
Saying that without being able to rely on tabletop business they’ve had to adjust their entire business strategy Councilman Daniel Rivera said that the Order is another indication that the local government is doing all they can to support restaurants and other small businesses.
“I know it will truly be impactful for them.”
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