Posted: Jun 27, 2019
Uber and Grubhub executives are schedule to testify before the Small Business Committee.
No one denies that the advent of digital ordering has changed and continues to change the restaurant industry. A report earlier this week even suggested that diners are happier when they order in from a restaurant than when they eat out. But as with any emerging industry, the specifics of how delivery apps are impacting restaurants isn’t always clear. For instance, in recent months, GrubHub has faced accusations from restaurants claiming the delivery service has quietly charged a litany of unwarranted fees. This issue is one of many that New York’s city council plans to look into today during a scheduled 1 p.m. oversight hearing — billed as a “first in the nation” — featuring testimony from both delivery executives and local restauranteurs.
“Estimated to be upwards of a $200 billion market in the U.S., food delivery apps have dramatically changed the way customers place food delivery orders and interact with local restaurants,” the NYC Council said, previewing the hearing. “As the market has grown, stakeholders are starting to grapple with major issues such as significant fee/commission rates charged to restaurants, the method used to collect and store private customer data and order history and, the possibility of undocumented workers being exploited. The Committee will review these issues and others during the hearing.”
Though the county didn’t provide any specific names, the announcement did state that speakers would include “Uber and GrubHub Executives; Representative from the Federal Small Business Administration, Local Restaurant Owners; [and] Antitrust Experts.” Earlier this month, Bronx Councilman Mark Gjonaj who chairs the Small Business Committee, which is behind the hearing, told the New York Post, “We’re trying to figure out ways for small businesses, these mom-and-pop shops, to keep their doors open…. You never expect something like Grubhub to come in and undermine the business model, and have an impact on whether or not they stay in business.” Another issue the committee will look into is the percentage cut delivery services take from restaurants, which are likely higher than many diners realize.
Furthermore, Gjonaj also stated that if the hearing uncovered any dubious activity — be it bogus fees or anything else — legal action isn’t off the table. “If we see there is abuse, or if there is a manipulation here, then it could certainly be referred to the legal authorities,” he told the Post. “There is always the potential that this hearing will lead to an investigative hearing from the public advocate, the city comptroller or the state attorney general.”
By Mike Pomranz
June 27, 2019
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