A New Bill Would Fine Delivery Platforms for Listing NY Restaurants Without Their Permission

A new bill has been introduced in New York that aims to ban delivery apps like Grubhub and DoorDash from listing restaurants on their marketplaces without permission from the businesses.

Introduced this week, the legislation would prohibit the apps from offering delivery from any New York restaurant without written permission from the restaurant. If a restaurant requests to be removed from a service like DoorDash, the company has five days to remove the business from its platform. After that period, delivery services would be fined $500 per day for every day that the restaurant continues to be listed on the platform without its consent.

State senator Brad Hoylman, who represents parts of Manhattan including Times Square and Hell’s Kitchen, and Assemblymember John McDonald III of Albany are sponsoring the new legislation.

The widespread practice of delivery services listing restaurants on their platform as offering delivery — whether or not they actually signed an agreement with the service — has been an ongoing headache for many restaurants. DoorDash has come under fire due to the practice, and Postmates has been signing up restaurants on its platform without their consent for years. Grubhub, which owns Seamless, said in 2019 that it added the practice to its business model “so we will not be at a restaurant disadvantage compared to any other food delivery platform.”

The new bill was introduced in New York just after a similar law went into effect in California on January 1. There, the legislation followed a widely-covered incident with San Francisco restaurant Kin Khao last January, when owner Pim Techamuanvivit put a spotlight on the dubious practice at her own restaurant. “They’re impersonating me, defrauding me, defrauding my guests and their customers,” Techamuanvivit said at the time.

NYC Hospitality Alliance executive director Andrew Rigie told Gothamist that the new legislation was “incredibly important” for the city’s restaurants. “It’s absurd that we even need legislation to regulate these practices, but it’s another example of the egregious business practices of certain third party delivery companies,” Rigie said.

If enacted, the legislation would be the latest in a series of moves that local lawmakers have made during the pandemic to rein in delivery services’s business practices. In May, the city signed into law a temporary measure that banned delivery services from charging more than 20 percent in fees to restaurants during the pandemic. The temporary fee cap was extended in August to last until 90 days after indoor dining returned at full capacity in the city.