Murphy Signs Legislation to Limit Excessive Third-Party Delivery Service Fees During COVID-19 State of Emergencies

TRENTON – Gov. Phil Murphy has signed legislation placing limits on service fees charged to restaurants by third-party delivery applications and websites during state of emergencies declared by the Governor in response to COVID-19.  The new law provides relief to restaurants that have faced excessive fees while being limited to takeout and delivery service.
 
 
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“By following public health guidelines, restaurants across New Jersey have contributed to flattening the curve and to the enormous progress we have made against COVID-19,” Murphy said. “Through this legislation, now law, dining establishments throughout our state will receive much needed relief from excessive service fees if public health necessitates the return of dine-in restrictions.”
 

The law prohibits third-party food takeout and delivery service applications and websites -- such as GrubHub, DoorDash, and Uber Eats -- from charging service fees greater than 20% of the cost of the individual order or greater than 10% of the cost of the individual order, when the order is delivered by an employee of the restaurant or an independent contractor with whom the restaurant has contracted directly. The limits are in effect during a state of emergency and until the first day of the third month following any state of emergency declared by the Governor in response to COVID-19 that restricts restaurant dine-in service to less than 25% of the maximum capacity allowed by law.
 
Primary sponsors of this legislation include Senators Vin Gopal and Joseph Cryan and Assemblymembers Annette Quijano, Serena DiMaso, and Aura Dunn.

 
“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. For now, they are relying on takeout to try to keep their businesses alive. It is unconscionable to take advantage of this crisis by  harging them inflated fees for delivery service. We need to support local businesses and work together to get through these hard times.”
 
“Third-party services are no longer fringe experiments, but rather a mainstream piece of the restaurant business,” said Assemblywoman Aura Dunn. “For all their hard work to keep afloat, this cap helps those restaurants stay in business.”
 

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