LI lawmakers consider limits for third-party food delivery app charges

NEW YORK - Restaurants relying on food delivery orders are quickly realizing while convenient for customers, third-party apps like UberEats, GrubHub and DoorDash are making it harder to survive.

Rustan Lundstrum owner of Coach Meeting House in Oyster Bay signed up with UberEats to make it easier for customers. He learned the hard way he was better off making his own deliveries.

"If you order a $10 cheeseburger, you’re probably paying $15 for that cheeseburger," Lundstrum said. "We’re getting $7 and we have to pay for food costs, our rent, we have to cover all those things  Restaurants operate at a 5-10% profit margin. So if a delivery fee is 30%, do basic math and it’s hard to make any money."

• From restaurants to retailers, virus transformed economies

Because of the coronavirus pandemic, Long Island restaurants are already operating at reduced capacity and struggling to keep their doors open.

The National Restaurant Association forecasts nearly 1 in 6 restaurants is closed, and the industry is on track to lose $240 billion in sales by the end of the year.

Legislator Josh Lafazan introduced the Nassau County Restaurant Protection Act on Wednesday. If passed, it would be effective immediately and limit the fees that apps can charge restaurants through 2022 to allow them time to recover from the pandemic.

"McDonald’s will survive, Taco Bell will survive," said Leg. Lafazan. "These small restaurants many of them won’t survive. Food delivery service must remain both accessible and affordable for all residents in Nassau County."

UberEats didn’t respond to our request for comment. DoorDash told us they support the restaurants and remain focused on working with policy makers to reach solutions. A GrubHub spokesperson added that while well-intentioned, fee caps would cost valuable jobs, tax revenues and important economic activity across Nassau County.

• New York City bars, restaurants pursue adaptation to survive

John Zozzaro co-owner of Downtown Cafe in Glen Cove says it’s more important than ever before for delivery companies to work with restaurants.

"If there’s no money to be made for us, we won’t be around," he said. "It doesn’t help them, it doesn’t help us."

New York City, LA, Chicago and Seattle have all passed measures to curb fees. The Nassau County Restaurant Protection Law is scheduled to be voted on in January.