This legislation is expected to significantly benefit local businesses, particularly restaurants, by safeguarding their margins against excessive fees charged by third-party delivery platforms. The bill aims to alleviate financial pressure on merchants who have increasingly relied on these services, especially in a post-pandemic world where digital ordering has become essential. Supporters argue that the measure enhances fair competition in the food delivery market, allowing smaller establishments to thrive alongside larger chains that historically dominate the online ordering space.
Summary
House Bill 1266, proposed by Rep. Maurice A. West, II, amends the Fair Food and Retail Delivery Act to establish a fee cap for third-party delivery services. Starting January 1, 2024, these services will be prohibited from charging retailers more than 15% of the purchase price per order through their digital networks. The bill also stipulates that third-party delivery services must offer merchants the option of core delivery services—defined as services that make the merchant discoverable and perform order deliveries—at a capped fee without requiring additional purchases. Furthermore, delivery services are obligated to notify affected merchants of these options by November 1, 2023.
Contention
While the bill garners support from many in the restaurant sector, there may be concerns among delivery services regarding revenue implications. Advocacy groups and lobbyists associated with third-party platforms might argue that such restrictions could hinder their operational flexibility and limit their ability to offer varied services to merchants. Critics may also point out that while the fee cap is meant to protect consumers, it could lead to adjustments in service quality or availability as delivery companies adapt to the new financial constraints. Thus, the bill represents a balancing act between consumer protection and service provider sustainability.