City Council Passes Bill Capping Delivery App Commission Fees at 12 Percent

NEW YORK — The New York City Council voted Thursday to permanently cap the commission fees that food delivery platforms can charge restaurants at 12 percent of an order's subtotal, making permanent an emergency rule first enacted during the pandemic that the restaurant industry has pressed the city to maintain ever since. The bill passed 38 to 10, with opponents arguing that the cap distorts market prices and ultimately harms the consumers it purports to protect. The measure now goes to the mayor, who is expected to sign it.

The legislation covers all third-party food delivery platforms operating in the five boroughs, including DoorDash, Uber Eats, Grubhub, and smaller regional services. Before the pandemic emergency cap was first enacted in 2020, platforms were charging restaurants commission rates ranging from 15 to 30 percent of order subtotals, a level that restaurant advocates said was squeezing already thin margins and forcing some operators to either raise menu prices on delivery orders or absorb unsustainable losses on their delivery business.

DoorDash and Uber Eats have both maintained that the cap forces them to raise consumer-facing fees and reduce driver pay, effectively shifting costs rather than eliminating them. Uber Eats filed a federal lawsuit challenging the cap's legality in 2024, arguing that it unconstitutionally interferes with private contracts; that case is pending in the Second Circuit. In statements released after Thursday's vote, both companies reiterated their legal objections and said they were evaluating their options in light of the vote.

Restaurant advocates who backed the bill dispute the platforms' framing. The NYC Hospitality Alliance, which represents more than 1,000 food and beverage businesses, said its survey data show that average delivery menu prices at member restaurants have not increased materially since the emergency cap was enacted, and that the cap has allowed operators to remain profitable on delivery orders that would otherwise be money-losing. "Without this cap, the math on delivery simply does not work for most independent restaurants," said the alliance's executive director. "The platforms would rather have unlimited ability to extract margin than acknowledge that their business model requires restaurants to subsidize it."

The economics of third-party delivery remain contested terrain. Academic studies of the pandemic-era cap have produced conflicting findings: some show that reduced platform fees modestly improved restaurant profitability while others find evidence that platforms offset the cap through increased consumer fees and reduced promotional subsidies. The platforms argue that the full-fee market is more efficient because it allows them to invest in technology and service quality that ultimately benefits consumers and restaurants. Restaurant owners counter that the pre-cap market was characterized by take-it-or-leave-it power dynamics that gave small operators no negotiating leverage.

Councilmember Tasha Williams of Brooklyn, the bill's lead sponsor, said the vote reflects a straightforward judgment about whose interests the city chooses to protect when powerful platforms and small businesses are in conflict. "These are neighborhood restaurants — family businesses that employ New Yorkers, pay city taxes, and are part of what makes each block in this city worth living on," she said from the council floor. "We are not going to let a platform operating from a corporate headquarters in San Francisco extract a third of their revenue in exchange for an app."

Implementation and enforcement will be handled by the Department of Consumer and Worker Protection, which is expected to issue updated regulations within 60 days of the bill's signing. The department has enforcement authority to investigate complaints from restaurants and impose fines on platforms found to be charging above the cap. Several council members who voted for the bill said they intend to monitor enforcement closely, noting that the department received relatively few complaints during the emergency cap period and urging proactive outreach to restaurant operators who may not be aware of their rights.