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Uber Eats Temporarily Suspends Some NYC Restaurant Fees

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The move comes just after City Council mandated a delivery fee cap during the pandemic

An Uber Eats delivery worker is seen riding an electric scooter in Manhattan’s Chinatown on March 19, 2020 in New York City.
A delivery worker with an Uber Eats bag
Photo by Dia Dipasupil/Getty Images
Erika Adams is the editor of Eater Boston.

Uber Eats is temporarily cutting some of the fees it charges to restaurants, the New York Post reports. Beginning this week, the food delivery company is waiving non-delivery fees for some restaurants — including order processing and marketing fees — through October 31. Uber Eats will still charge its regular fees to restaurants that use its delivery services.

For restaurants that don’t use Uber Eats to complete deliveries, those businesses will temporarily keep all of the money earned on orders placed through the platform, the company confirms to Eater. But restaurants that use Uber Eats’ delivery services will still be charged all regular delivery and non-delivery fees, which can amount to a 20 percent commission on each order in NYC.

Sources estimated to the Post that the move would only cost Uber Eats about a quarter of its total revenues in NYC. The “vast majority” of existing Uber Eats customers use the service not just as a marketing tool but also to complete deliveries, according to the report.

“We would have loved for Uber Eats to waive their fees months ago but it’s definitely better late than never and we appreciate their effort,” NYC Hospitality Alliance executive director Andrew Rigie says. “More delivery companies should follow.”

NYC restaurateurs tell the Post that they welcome the new promotion if it means they’ll save a little more money.

The promotion comes weeks after City Council voted to install a fee cap on all food delivery companies operating in the city in a bid to support restaurants limited to only offering takeout and delivery during NYC’s COVID-19 shutdown. According to the terms of the fee cap, restaurants can only be charged up to 15 percent on delivery fees and up to 5 percent on non-delivery fees, such as marketing and order processing fees.

Some industry sources speculated to the Post that the promotion will help Uber Eats siphon off customers from rival delivery service Grubhub. In NYC, Grubhub — which also owns Seamless — accounted for 52 percent of food delivery sales in May, while Uber Eats had 23 percent of the market, according to data analytics firm Second Measure.

Competition between the food delivery services has been sharp as the industry moves towards consolidation. Grubhub was recently acquired by European delivery competitor Just Eat Takeaway, after weeks of speculation that Uber may buy Grubhub. Now, Uber is reportedly looking to buy Postmates, another national food delivery competitor.

Update, 1:30 p.m.: This story has been updated with information from Uber Eats to clarify that restaurants that use the company’s delivery services will still be charged both delivery and non-delivery fees during the length of the promotion.