New Jersey Assembly Bill A5751

New Jersey 2022-2023 Regular Session

• Introduced: 11/30/23
• Refer: 11/30/23

Caption

Limits service fees charged to restaurants by third-party food takeout and delivery applications.

Impact

The enactment of A5751 will amend existing regulations concerning the relationship between restaurants and third-party delivery services. It expressly overrides any county or municipal laws that currently govern these matters, establishing a uniform standard across the state. Additionally, the law will have a temporary lifespan until the first day of the twenty-fifth month after its enactment, during which the Director of the Division of Consumer Affairs is mandated to assess the bill's impact on both restaurants and consumers. Following this period, recommendations will be made to consider permanent adoption of the service fee limits.

Summary

Bill A5751 aims to limit the service fees charged by third-party food takeout and delivery applications to restaurants. The bill makes it unlawful for these platforms to charge a service fee exceeding 20% of the cost of an individual order. Furthermore, if a delivery is conducted by an employee of the restaurant or a contracted independent contractor, the fee is capped at 10%. This legislative measure is expected to alleviate some of the financial burdens faced by restaurants, particularly in light of the challenges posed during the COVID-19 pandemic.

Contention

Debate surrounding A5751 centers on the balance between service fees and restaurant profitability. While proponents argue that the bill is necessary for protecting struggling restaurants from exorbitant fees that can impact their survival, critics may contend that such regulations could affect the business models of third-party delivery services. There are concerns about the potential unintended consequences of restricting these fees, which may limit the operational capabilities of delivery platforms and impact their capacity to provide services to restaurants effectively.