Liquor Authority mulls eatery delivery fee cap

Measure would stop services like Grubhub from adding over 10%

A new regulatory measure being considered by the State Liquor Authority would prohibit food-delivery companies like Grubhub from charging restaurants a fee of more than 10 percent of each order total, a sharp drop from the 25 percent to more than 30 percent most currently impose.

The fee cap would apply only to restaurants that serve alcohol and are licensed by the SLA; the agency has no jurisdiction over businesses without a liquor license. It would also affect companies like Drizly that take online orders for wine and spirits deliveries from local stores. In New York, restaurants with liquor licenses are allowed to deliver beer but not wine or spirits.

… If implemented, the new measure would affect restaurants more than consumers. In a pricing breakdown provided for prospective restaurants by Grubhub, a hypothetical order for which a customer picking up the order in person would pay $41, before sales tax, would net the restaurant just $27.05 for delivery, after Grubhub’s fees were subtracted: 20 percent marketing commission, 10 percent delivery commission and, for processing, 3.05 percent plus 30 cents. In that scenario, the restaurant is paying 34 percent — almost one-third — for the privilege of being on Grubhub, which, as the company’s pitch goes, “increases your order volume by putting your restaurant’s menu in front of millions of hungry diners, enabling them to easily order online.” If fees were capped at 10 percent, the restaurant would have an additional $10 in revenue from that one order alone.


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