Grubhub fees hurting small businesses, claims NYC council member

A New York City politician is pooh-poohing claims by food-delivery apps that they help mom-and-pop restaurants more than they hurt them.

City Council Member Mark Gjonaj on Monday pushed back against a key claim by Grubhub, the parent company of Seamless, to justify the stiff fees it charges restaurants — namely, that customers who order through its app also end up becoming profitable customers who eat at the restaurants, too.

“We found no evidence that this is the case,” Gjonaj, the chair of the NYC Council’s Committee on Small Business, said in a letter to the State Liquor Authority, which has proposed new rules that would limit delivery companies’ profits.

“As a matter of fact, many restaurant owners have said that the delivery services’ orders are cannibalizing their existing customer base,” he added.

In response, Katie Norris, a spokeswoman for Grubhub, pointed to an undated survey by Technomic in which seven out of 10 restaurant owners ranked it highest for attracting new customers.

Six of 10, according to the survey, say Grubhub “brings the most value” to their businesses.

The survey, however, didn’t address whether Grubhub lures delivery customers to restaurants’ dining rooms.

Gjonaj’s barb comes as the SLA is considering imposing a cap of 10 percent on commissions for third-party delivery apps like Grubhub, Seamless and Uber Eats. Currently, the apps charge restaurants as much as 30 percent on each order.

The proposed cap got qualified support in a Thursday letter from the New York City Hospitality Alliance, an advocacy group for restaurants, bars and hotels.

“The current retail environment is difficult enough without behemoth companies demanding ever-increasing percentages of small businesses’ revenue in an unregulated manner,” according to the letter.

The cap will be discussed on Oct. 7 by the SLA. Meanwhile, on Tuesday afternoon, Grubhub is slated to meet with restaurants to discuss these issues at its Bryant Park offices.

As the comment period ended last week, the SLA received a flurry of submissions from restaurants, legislators and others, a spokesman for the agency told The Post.

“Sadly, the new rule will force our local restaurants to choose whether they want to have a liquor license or if they want to be a delivery service,” wrote New York State Senator Frederick J. Akshar II, who represents the 52nd District.

Those arguments, however, haven’t gained traction with city restaurants’ own industry group.

“If the current group of monopolistic third-party delivery companies do leave, it will only provide opportunity for new companies to enter the marketplace, create competition, and charge small businesses lower rates and better terms,” the Hospitality Alliance wrote in its letter.