Molinaro imposes service cap on restaurant delivery services; chamber opposes it

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POUGHKEEPSIE – Dutchess County Executive Marc Molinaro on Thursday signed Local Emergency Order No. 13, which supports local restaurants by temporarily capping service fees charged by third-party food delivery companies to no more than 15 percent of the cost of the food order.

Third-party food delivery companies, such as Grubhub and Door Dash, among others, provide customers with easy-to-use apps for ordering food online.

During the COVID-19 pandemic, restaurants are relying more on takeout and delivery orders, so those delivery services have become a convenient way to have food delivered.

Molinaro noted that fee structures used by these companies, which can be as much as 30 percent for delivery orders, are cutting into local restaurants’ profits during this time of hardship for the entire food services and hospitality industry.

“The economic fallout from the COVID-19 pandemic has negatively impacted many industries, but none more so than the foodservice and hospitality industry. By temporarily capping the fees to no more than 15 percent, the emergency order will provide much-needed relief to struggling local businesses and help ensure the survival of our local restaurants,” he said.

The Dutchess County Regional Chamber of Commerce has opposed the order. “The government has no right interjecting in price capping a market without first addressing the real issues that could be better regulated and have a much better impact on the businesses that need relief,” said Chamber President Frank Castella Jr.

The chamber’s proposal, including giving the restaurant the option to pass on the service fee to the customer and allowing the restaurant to permit the service provider to increase pricing on a product or service, is a more reasonable alternative to the county’s approach, Castella said.

“Our solution would have offered further aid in that businesses could have chosen to pass the full 30 percent to the customer.  Instead, they are still strapped with 15 percent when many don’t make that as a profit margin.”

Castella also noted that restaurants are not the only business sector suffering as a result of the pandemic, Event venues that have been closed since early last year are facing permanent closing due to loss of business.

County Legislature Assistant Minority Leader Nick Page said, “I applaud the county executive for enacting my caucus’ initiative to prioritize the survival of local restaurants in their time of crisis. Acting together, we can best weather the storm.” The minority caucus is Democratic; Molinaro is a Republican.

In addition to the latest emergency order, Dutchess County Government has partnered with Community Capital New York to provide $430,000 to assist microenterprise businesses negatively affected by COVID-19.

In June, the county executive issued an order waiving local regulations and requirements to allow the opening of outdoor dining. County staff has provided guidance on state requirements, advocated for support for small businesses from the federal government, and worked with state officials to help provide foodservice establishments with flexibility and relief from mandates, according to county officials.