The mayor of Jersey City on Thursday signed an executive order mandating delivery apps like Uber Eats and GrubHub to lower service fees for restaurant owners to 10%.
The new order going into effect Friday is intended to protect many small restaurant owners who have lost as much as 80% of their business due to the coronavirus shutdown. With most delivery services charging 30% of the restaurant's profits, Restaurant owners like Dave Jacey of Black Bear Bar and Grill say they're being taken advantage of while they're already struggling.
“It’s been devastating. I’ve never seen it like this. We’ve been here through 9/11, the financial crisis, Sandy and it’s never been like this," Jacey tells NBC New York. “I think they’re taking advantage of these small businesses during this tough time they should give some back.”
While companies like DoorDash, GrubHub and Uber Eats play an important role in putting food in the hands of people who are quarantined at home, Mayor Steven Fulop said, "They also charge a very, very large premium for playing that role and that ultimately comes out of the restaurateur’s pocket so we wanna just find the balance."
In response to the executive order, Uber Eats said that customers could be the ones who suffer as a consequence.
"A 10% commission is not enough to cover fair pay for delivery people, and as a result we will likely have to add a surcharge on orders from Jersey City restaurants to pay delivery drivers," the company said.
Uber Eats also said they have to pay credit card fees, noting that their company has not yet turned a profit.
In a statement, GrubHub said, "We believe that any cap on fees represents an overstep by local officials and will not withstand a legal challenge."
The cap would only last until the end of the pandemic and discussions are underway on whether the city council can tweak the bill over the next month and raise the cap to 15%.