Legislation boosts restaurant recovery and supports small businesses by requiring third-party food delivery services to share customer data with restaurants
FOR IMMEDIATE RELEASE
July 29, 2021
New York, NY — Today the New York City Council passed legislation by Council Member Keith Powers that creates a fairer delivery market for restaurants by requiring third-party food delivery services to share more customer information with local eateries upon request. This bill is the first of its kind, and will set the precedent for how municipalities can aid local restaurant recovery while providing protections over consumer privacy.
The COVID-19 pandemic hit New York’s restaurant industry particularly hard. In 2020, 40 percent of all restaurant jobs disappeared, and at least 1,000 eateries closed their doors. As New Yorkers stayed at home, many restaurants looked to third-party delivery options as a way to maintain revenue streams. From April to September 2020, DoorDash, Uber Eats, GrubHub, and Postmates generated over twice as much as their combined revenue during that time in 2019.
“After such a devastating year for restaurants, this bill will finally give them some much-needed relief and leverage in the delivery market,” said Council Member Keith Powers. “Local restaurants will not only gain a better understanding of who is ordering from them, but it’ll be much easier for them to manage relationships with their customers.”
The first of its kind in the nation, Introduction 2311 will establish a more equitable relationship between those that supply the delivery platforms with information and those that supply the delivered product, while allowing customers to have a choice. Under this bill, customers can request for third-party delivery services to not share their information with restaurants and the third-party delivery services must make it clear to customers that they can opt-out of information sharing at any time. Additionally, the third-party services must clearly state to customers that their information may be shared with a food establishment and disclose which restaurant is receiving the information. Restaurants may opt-in as well, and are prohibited from selling or disclosing the customer’s information.
“The relationship restaurants share with their customers is key to their success, and as we emerge from the pandemic, it is critical for their survival,” said Andrew Rigie, Executive Director, NYC Hospitality Alliance. “Unfortunately, for too long third-party delivery companies have withheld restaurants’ own customer data from them, to ensure they couldn’t directly manage their customer relationships in order to extract high fees from small businesses and to keep them hostage on their delivery platforms. Bravo to Councilmember Keith Powers for sponsoring this legislation that will require third-party delivery companies to provide restaurants with their own customer information, which will create a more fair and equitable marketplace that empowers local restaurants and their customers. We urge the City Council to pass this legislation immediately and for the Mayor to enact it promptly.”
“This is one of the most important pro small business/consumer pieces of legislation in a very long time,” said Robert Bookman, Esq. Counsel to the NYC Hospitality Alliance and member of the Nightlife Advisory Board. “It will go a long way to allowing neighborhood restaurants to communicate directly with their own customers, cutting out the billion dollar middleman.”
“Many restaurants are at a disadvantage because of artificial barriers put in place between them and their customers. We want to thank our sponsor, Council Member Keith Powers, and Speaker Corey Johnson for standing up for restaurants and passing a bill that says these barriers are not acceptable,” said Jeffrey Garcia, President of the NYS Latino Restaurant Bar & Lounge Association. “Our members will now be able to go deeper in their communities and reach further outside of their neighborhoods in a way they couldn’t before.”
“The NYJRA and its members suffered during the pandemic as did so many in the hospitality industry and many of the struggles for recovery continue to this day,” said Bon Yagi, President, New York Japanese Restaurant Association. “The proposed legislation would significantly help correct and regulate the inequitable economic structure and relationships between restaurants and these multi-billion dollar corporations operating delivery platforms. The NYJRA urges passage of Councilmember Powers’ legislation to allow the Japanese restaurant community to have access to their own customer’s information that delivery companies withhold to help them recover in our great City.”
“Council Member Keith Powers’ legislation is essential,” said Jonathan Forgash, Executive Director, Queens Together Restaurant Association. “It gives restaurants access to their own customer data, withheld from 3rd party food delivery companies, allowing them to maintain and build relationships directly with their customers. Queens Together supports this legislation becoming law in New York City.”
“Operating a restaurant successfully depends on knowing detailed information on what, when and why a menu item is or isn’t selling,” said Andrew Ding, Owner, The Expat. “It is also fundamentally vital to our business that we are able to communicate directly with our audience. Operating without such data would make it impossible to achieve optimal efficiency and growth, and never has efficiency been more important than now. Thank you to Councilmember Keith Powers for sponsoring this very important legislation.”