S T A T E O F N E W Y O R K
________________________________________________________________________
565
2023-2024 Regular Sessions
I N S E N A T E
January 5, 2023
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Introduced by Sens. KAVANAGH, BORRELLO, BROUK, COONEY, HOYLMAN, JACKSON,
KRUEGER, PARKER -- read twice and ordered printed, and when printed to
be committed to the Committee on Consumer Protection
AN ACT to amend the general business law, in relation to third-party
food delivery service charges
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The general business law is amended by adding a new section
391-z to read as follows:
§ 391-Z. THIRD-PARTY FOOD DELIVERY SERVICE CHARGE. 1. FOR THE PURPOSES
OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
(A) "DELIVERY FEE" MEANS A FEE CHARGED BY A THIRD-PARTY FOOD DELIVERY
SERVICE FOR PROVIDING A FOOD SERVICE ESTABLISHMENT WITH A SERVICE THAT
DELIVERS FOOD FROM SUCH ESTABLISHMENT TO CUSTOMERS. THE TERM DOES NOT
INCLUDE ANY OTHER FEE THAT MAY BE CHARGED BY A THIRD-PARTY FOOD DELIVERY
SERVICE TO A FOOD SERVICE ESTABLISHMENT, SUCH AS FEES FOR LISTING OR
ADVERTISING THE FOOD SERVICE ESTABLISHMENT ON THE THIRD-PARTY FOOD
DELIVERY SERVICE PLATFORM OR FEES RELATED TO PROCESSING THE ONLINE
ORDER.
(B) "FOOD SERVICE ESTABLISHMENT" MEANS A PLACE WHERE FOOD IS PROVIDED
FOR INDIVIDUAL PORTION SERVICE DIRECTLY TO THE CONSUMER WHETHER SUCH
FOOD IS PROVIDED FREE OF CHARGE OR SOLD, AND WHETHER CONSUMPTION OCCURS
ON OR OFF THE PREMISES OR IS PROVIDED FROM A PUSHCART, STAND OR VEHICLE.
(C) "ONLINE ORDER" MEANS ANY ORDER PLACED BY A CUSTOMER THROUGH OR
WITH THE ASSISTANCE OF A PLATFORM PROVIDED BY A THIRD-PARTY FOOD DELIV-
ERY SERVICE, INCLUDING A TELEPHONE ORDER.
(D) "PURCHASE PRICE" MEANS THE TOTAL PRICE OF THE ITEMS CONTAINED IN
AN ONLINE ORDER THAT ARE LISTED ON THE MENU OF THE FOOD SERVICE ESTAB-
LISHMENT WHERE SUCH ORDER IS PLACED. SUCH TERM DOES NOT INCLUDE TAXES,
GRATUITIES AND ANY OTHER FEES THAT MAY MAKE UP THE TOTAL COST TO THE
CUSTOMER OF AN ONLINE ORDER.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01701-01-3
S. 565 2
(E) "THIRD-PARTY FOOD DELIVERY SERVICE" MEANS ANY WEBSITE, MOBILE
APPLICATION OR OTHER INTERNET SERVICE THAT OFFERS OR ARRANGES FOR THE
SALE OF FOOD AND BEVERAGES PREPARED BY, AND THE SAME-DAY DELIVERY OR
SAME-DAY PICKUP OF FOOD AND BEVERAGES FROM, NO FEWER THAN TWENTY FOOD
SERVICE ESTABLISHMENTS LOCATED IN THE STATE THAT ARE OWNED AND OPERATED
BY DIFFERENT PERSONS.
(F) "TRANSACTION FEE" MEANS A CHARGE FOR THE PROCESSING OF A PAYMENT
FOR AN ONLINE ORDER.
2. NOTWITHSTANDING ANY OTHER LAW, RULE OR REGULATION:
(A) NO THIRD-PARTY FOOD DELIVERY SERVICE SHALL CHARGE A FOOD SERVICE
ESTABLISHMENT A DELIVERY FEE THAT TOTALS MORE THAN FIFTEEN PERCENT OF
THE PURCHASE PRICE OF EACH ONLINE ORDER;
(B) IT SHALL BE UNLAWFUL FOR A THIRD-PARTY FOOD DELIVERY SERVICE TO
CHARGE A FOOD SERVICE ESTABLISHMENT ANY FEE OR FEES, OTHER THAN A DELIV-
ERY FEE PERMITTED UNDER PARAGRAPH (A) OF THIS SUBDIVISION, FOR THE USE
OF SERVICES PROVIDED BY SUCH THIRD-PARTY DELIVERY SERVICE THAT IS GREAT-
ER THAN FIVE PERCENT OF THE PURCHASE PRICE OF EACH ONLINE ORDER,
PROVIDED THAT SUCH CAP SHALL NOT APPLY TO A TRANSACTION FEE FOR USE OF
THEIR SERVICE. IT SHALL FURTHER BE UNLAWFUL FOR A THIRD-PARTY FOOD
DELIVERY SERVICE TO CHARGE A FOOD SERVICE ESTABLISHMENT A TRANSACTION
FEE THAT TOTALS MORE THAN THREE PERCENT OF THE PURCHASE PRICE OF EACH
ONLINE ORDER, PROVIDED HOWEVER THAT A THIRD-PARTY FOOD DELIVERY SERVICE
MAY CHARGE A FOOD SERVICE ESTABLISHMENT A TRANSACTION FEE OF MORE THAN
THREE PERCENT OF THE PURCHASE PRICE OF AN ONLINE ORDER IF: (I) SUCH
TRANSACTION FEE IS CHARGED TO THE FOOD SERVICE ESTABLISHMENT IN THE SAME
AMOUNT AS THE CHARGE IMPOSED UPON THE THIRD-PARTY FOOD DELIVERY SERVICE
FOR SUCH ONLINE ORDER, AND (II) SUCH THIRD-PARTY FOOD DELIVERY SERVICE
CAN PROVIDE PROOF OF SUCH CHARGE IMPOSED UPON IT TO BOTH THE ATTORNEY
GENERAL AND THE RELEVANT FOOD SERVICE ESTABLISHMENT UPON REQUEST.
(C) ANY FEE OR OTHER CHARGES FROM A THIRD-PARTY FOOD DELIVERY SERVICE
TO A FOOD SERVICE ESTABLISHMENT BEYOND SUCH MAXIMUM FIVE PERCENT FEE PER
ORDER AND A TRANSACTION FEE PURSUANT TO PARAGRAPH (B) OF THIS SUBDIVI-
SION, AND A DELIVERY FEE COLLECTED PURSUANT TO PARAGRAPH (A) OF THIS
SUBDIVISION, SHALL BE UNLAWFUL; AND
(D) NO THIRD-PARTY FOOD DELIVERY SERVICE SHALL REDUCE THE COMPEN-
SATION, INCLUDING BUT NOT LIMITED TO, ANY TIP OR GRATUITY, PAID TO ANY
WORKER, AS A RESULT OF COMPLIANCE WITH THE PROVISIONS OF THIS SECTION.
3. WHENEVER THERE SHALL BE A VIOLATION OF THIS SECTION, AN APPLICATION
MAY BE MADE BY THE ATTORNEY GENERAL IN THE NAME OF THE PEOPLE OF THE
STATE OF NEW YORK TO A COURT OR JUSTICE HAVING JURISDICTION TO ISSUE AN
INJUNCTION TO ENJOIN AND RESTRAIN THE CONTINUANCE OF SUCH VIOLATION; AND
IF IT SHALL APPEAR TO THE SATISFACTION OF THE COURT OR JUSTICE THAT THE
DEFENDANT HAS, IN FACT, VIOLATED THIS SECTION, AN INJUNCTION MAY BE
ISSUED BY SUCH COURT OR JUSTICE, ENJOINING AND RESTRAINING ANY FURTHER
VIOLATION, WITHOUT REQUIRING PROOF THAT ANY PERSON HAS, IN FACT, BEEN
INJURED OR DAMAGED THEREBY. IN ANY SUCH PROCEEDING, THE COURT MAY MAKE
ALLOWANCES TO THE ATTORNEY GENERAL AND DIRECT RESTITUTION OF AN AMOUNT
NOT TO EXCEED THE AMOUNT OF FEES COLLECTED IN VIOLATION OF THIS SECTION
BY A THIRD-PARTY FOOD DELIVERY SERVICE, ATTORNEYS' FEES, AND SUCH OTHER
REMEDIES AS THE COURT MAY DEEM APPROPRIATE. WHENEVER THE COURT SHALL
DETERMINE THAT A VIOLATION OF THIS SECTION HAS OCCURRED, THE COURT MAY
IMPOSE A CIVIL PENALTY OF NOT MORE THAN ONE THOUSAND DOLLARS FOR EACH
VIOLATION. EACH DAY A VIOLATION OF THIS SECTION IS CONTINUED AND EACH
FOOD SERVICE ESTABLISHMENT CHARGED A FEE IN VIOLATION OF THIS SECTION
SHALL CONSTITUTE A SEPARATE VIOLATION. IN CONNECTION WITH ANY SUCH
PROPOSED APPLICATION THE ATTORNEY GENERAL IS AUTHORIZED TO TAKE PROOF
S. 565 3
AND MAKE A DETERMINATION OF THE RELEVANT FACTS AND TO ISSUE SUBPOENAS IN
ACCORDANCE WITH THE CIVIL PRACTICE LAW AND RULES.
4. THIS SECTION SHALL NOT ANNUL, ALTER, IMPAIR OR AFFECT THE LAWS,
ORDINANCES, REGULATIONS OR RULES OF LOCAL GOVERNMENTS THAT HAVE ADOPTED
OR AMENDED LOCAL LAWS, ORDINANCES, REGULATIONS OR RULES NOT INCONSISTENT
WITH THIS SECTION, INCLUDING WITHOUT LIMITATION CITIES WITH A POPULATION
OF ONE MILLION OR MORE, WHILE SUCH LOCAL LAWS, ORDINANCES, REGULATIONS
OR RULES REMAIN IN EFFECT.
§ 2. This act shall take effect immediately.