New Jersey Assembly Bill A1898

New Jersey 2024-2025 Regular Session

• Introduced: 1/9/24
• Refer: 1/9/24

Caption

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

Impact

The bill's provisions will supplant existing municipal laws regarding service fees in this sector, thereby establishing a statewide standard. The expectation is that this initiative will help stabilize restaurant operations by controlling exorbitant fees that can diminish their profit margins. The legislation reflects past actions taken during emergency conditions, signaling a response to ongoing or future economic challenges faced by the food service industry.

Summary

Assembly Bill A1898 is aimed at limiting the fees charged to restaurants by third-party food takeout and delivery applications. Specifically, the bill enacts a regulation that prohibits these services from charging restaurants a service fee that exceeds 20 percent of the cost of an individual order. For orders delivered by restaurant employees or independent contractors working for the restaurant, the maximum fee is set at 10 percent. This measure is intended to alleviate financial pressures on restaurants, which have been significant, especially during the COVID-19 pandemic.

Contention

One notable aspect of A1898 is the preemption of local regulations, which could be contentious among government officials and restaurant owners who favor local autonomy. The bill includes a review provision, requiring the Director of the Division of Consumer Affairs to assess the impact of these limits after they have been in effect for a period of time, thus ensuring accountability and the possibility of future amendments based on real-world outcomes. As with any regulatory measure, there may be debates surrounding the necessity of such caps versus the potential unintended consequences they might create in the local economy.