NYC Council Passes Bill to Cap Food Delivery Fees, Supporting Small Restaurants

The New York City Council passed legislation on May 1, 2025, designed to limit the fees that food delivery services charge restaurants, a move aimed at providing much-needed relief to small businesses. The new law continues the existing cap on these fees while introducing options for additional services.

Council Member Raphael Salamanca sponsored the legislation, officially titled Introduction 762B. The bill maintains a strict cap on commission fees charged by third-party delivery services. However, it allows these companies to offer optional enhanced marketing services at an additional fee of up to 20%. Crucially, this enhanced fee can only be levied if the delivery service also presents restaurants with the option of a basic service plan priced within the existing fee limits, which includes standard delivery services.

The legislation establishes clear guidelines, ensuring that basic services remain subject to capped charges, protecting restaurants that opt not to use enhanced marketing options (Source: https://youtu.be/pN9tFCjAqhE&t=570). By doing so, the Council aims to empower small and independently-owned restaurants, enabling them to invest in marketing and expand their customer reach without the burden of exorbitant fees from delivery services.

This initiative marks New York City as one of the last major urban areas to uphold such caps in the face of legal challenges from delivery app companies. Supporters argue that the bill not only helps stabilize small businesses but also provides transparency in pricing for marketing services, preventing unexpected charges that could negatively impact restaurateurs (Source: https://youtu.be/pN9tFCjAqhE&t=564).

The legislation has garnered widespread backing from various restaurant and business organizations, reflecting the broad consensus on its importance for sustaining the character of local dining establishments in a challenging economic landscape (Source: https://youtu.be/pN9tFCjAqhE&t=654). Furthermore, it addresses the need for flexibility, enabling restaurants to tailor their use of delivery platforms to the nuances of their specific needs, instead of adhering to a one-size-fits-all model (Source: https://youtu.be/pN9tFCjAqhE&t=652).

Overall, this legislative victory represents a crucial step in supporting the health of local businesses and ensuring that delivery services do not impose excessive costs that could jeopardize their viability. With this cap in place, New York City aims to foster a more equitable environment for both restaurants and delivery workers involved in the food delivery ecosystem.