Uber Eats

NYC extends caps on food delivery apps amid pandemic recovery

Uber Eats
Source: BBC

Food delivery, in most countries, has been categorized as “essential services”, meaning that they were operational even during the peak of the pandemic.  However, with fewer people ordering food online, food delivery services, even being operational hit a massive rock bottom during the months of the pandemic-induced lockdown and consequently, their survival became a big question during these times.

Having said that, New York City came to the rescue for food delivery services in its jurisdiction and slashed the 35 percent food delivery fees and capped it to only 15 percent to help restaurants survive the global pandemic and the financial losses that came with it. According to recent reports, NYC is extending the limits of this cap on food delivery apps until February 17th, 2022. As reported by Engadget, the limits were previously set to expire in the month of August this year with the fees capped at 15 percent for deliveries and 5 percent for services other than deliveries.

As mentioned in a report by Gothamist and noted by Engadget, the City Council of New York City has recently passed the said bill to extend caps on delivery fees until February next year. For those of you who are unaware, the pre-COVID-19 fees slab is 35 percent but only to save restaurants from shutting down, this added financial liability has been slashed down to 15 percent by the New York City Council.

It is true that the pandemic is almost over and most countries in the world are in recovery mode but businesses that have been hit financially are still recouping with the losses and trying to get back up on their feet and with services like food delivery, restaurants are largely relying on these services for their business because the walk-in clientele is still slow because of social distancing, the restaurant cannot even be occupied to its full potential, in most countries of course.

However, it would not be a wise decision at this crucial time to return to higher fees from food delivery services as it would completely shake the businesses starting over from scratch as they recover from the pandemic.

Currently, there are debates happening on the City Council’s decision to extend caps on food delivery. Some businesses including DoorDash, Uber Eats, and GrubHub concern that these caps might just become permanent and restrict the app’s long-term viability, as mentioned in a report by Engadget. While there are supporters that vote to make these changes permanent.

Furthermore, restaurants are eager to avoid as much tax as they can at this point and are definitely not ready to return to the previous 35 percent fees slab. However, the main focus of restaurants is to keep their prices and accounts in check to ensure minimal profits and slowly gain momentum as and when people return to restaurants like the pre-COVID times.