A leader in New York City’s hospitality industry says a proposed bill that would loosen the cap on a delivery app fee would be detrimental to restaurants across the five boroughs. 

Andrew Rigie, executive director for the New York City Hospitality Alliance, said food delivery apps – such as Uber Eats, DoorDash and Grubhub – have already created a market that is unfair to restaurants. 

“These three companies dominate the marketplace. And they have so much market power and so much market share that they're able to manipulate the market, direct customers and play all these games that really come at the expense of local restaurants, the expensive of the deliveristas that deliver the food and the actual customer that's ordering the food,” Rigie said on “Mornings On 1” Thursday. 

Currently, delivery apps can charge a restaurant a total of 23% of an order – 15% for delivery fees, 3% for transaction fees and up to 5% for other fees. 

The bill, introduced in November, seeks to loosen that 5% cap, which was put in place two years ago when restaurants were experiencing pandemic-related profit losses, so that apps could charge restaurants for marketing services. 

During a hearing Wednesday before the City Council Committee on Consumer and Worker Protection, representatives with DoorDash testified that the new bill would not end fee limits entirely and would give restaurants access to more marketing options through the apps. 

The company said it may have to reduce service levels and raise customer fees if the cap remains in place. 

Rigie calls those remarks “fear-mongering.” 

“This is what always happens: ‘If you don't let us do whatever we want to do, if you don't deregulate big delivery, that customers are going to pay more, restaurants are going to lose business.’ I mean, they're scaring people,” he said. 

“We're not asking for anything crazy. We're just asking for basic common sense regulation to ensure a fair and equitable marketplace for small businesses.”