The City Council passed a slate of bills on Wednesday aimed to provide relief to small businesses struggling to stay afloat during the COVID-19 crisis.
The bills range from placing a cap on delivery fees charged by delivery apps like Grubhub to waiving sidewalk cafe fees, and are designed to supplement the city and federal loans programs implemented in response to the pandemic.
“Small businesses and restaurants are the heart and soul of our city. They were struggling before COVID hit and this shutdown has been catastrophic for so many of them,” City Council Speaker Corey Johnson said during the vote. “This is not the time for our restaurants to pay high fees nor should any COVID-impacted businesses be exploited by their landlords.”
The bills were introduced as a part of a broader coronavirus relief package last month that included an “Essential Workers Bill of Rights,” which would force large companies to provide hazard pay and paid sick leave for their employees. Those bills are still being finalized after a marathon hearing earlier this month.
Here’s a rundown of the bills the council passed during a Zoom meeting on Wednesday:
Delivery App Fees Capped
Third-party delivery apps—like Grubhub/Seamless, Postmates, and Uber Eats—will be prohibited from charging restaurants fees in excess of 20 percent per order.
Currently, apps such as Grubhub typically charge fees amounting to 20 percent of the order for deliveries—not including tips or taxes—and 10 percent for the order itself. This measure reduces those to 15 and 5 percent, respectively.
“They’re sucking the blood and the life out of our small restaurants,” Queens Councilmember Francisco Moya said.
The bill will take effect immediately, and will apply for the duration of the pandemic and another three months after restaurants are allowed to seat customers.
A second bill prohibits apps services from charging restaurants for phone calls that don’t result in an actual food order. Fines would be up to $1,000.
Suspension of Personal Liability Clause
The City Council passed a bill that would protect business owners’ personal assets from being taken in the case of a commercial lease violation if the business is impacted by the COVID-19 pandemic.
“Clearly it’s grossly immoral to go after personal assets during a national pandemic especially when they’ve already lost their main source of income and life’s work,” East Village Councilmember Carlina Rivera, who sponsored the bill, told Gothamist.
“There's going to be many many businesses that will never reopen again. So I want to be creative in my thinking. I want to be innovative. I want to look at how we can supplement all the financial loss that we can’t directly provide,” she said.
The NYC Hospitality Alliance executive director Andrew Rigie says the suspension of enforcing the provision would give business owners a “chance to reopen and eventually operate a successful business in the future.”
The Real Estate Board of New York testified against the bill last month for “legal and practical reasons.”
Rivera maintained the bill was reviewed by counsel and under a state of emergency, there is broad authority to issue such suspensions. According to the bill’s language, the suspension lasts until September 30th.
No Sidewalk Cafe Fees
Sidewalk cafe fees will be waived through February 28, 2021 under another bill led by Bronx Councilmember Andrew Cohen. Fees and deposits can cost up to several thousand dollars, depending on square footage and location.
Ahead of the vote, Cohen said the bill is “a targeted piece of legislation that’s really going to help an industry that is in desperate need.”
The Department of Consumer and Worker Protection Commissioner Lorelei Salas has said that about 1,000 businesses have sidewalk cafe licenses, a fraction of the 75,000 total businesses that are issued licenses.
“Many businesses, as you know, pay this fee over the entire year,” Cohen said. “There’s no revenue to pay that fee. I also think it can play an important role when we reopen restaurants if restaurants' capacity is limited initially.”
Third Avenue Business Improvement District CEO Michael Brady supports the legislation and the other bills, but was frustrated with how long it took until some relief arrived.
“It’s upsetting because all of these things could have been handled two months ago but they weren’t,” Brady, who leads a BID in the Bronx, which got the lowest percentage of small business loans in NYC, told Gothamist.
Elected officials and members of the de Blasio administration are already eyeing how sidewalks and streets can be used to help restaurants reopen once an eventual phased reopening plan begins in New York City.
Speaker Johnson and Councilmember Rivera have expressed support for these kinds of open spaces—though Johnson acknowledged it is likely a ways off.
“I think it needs to be done in a way that is not gonna make it difficult for pedestrians to be able to pass in a safe manner,” Johnson said during a press conference ahead of the vote. “There are places in the city where you could do something along these lines. … Outdoor, we know, is safer than indoor so we need to be creative through the Department of Transportation and the Department of Consumer Affairs.”
Another bill would extend renewal deadlines for various licenses and permits.
Protecting Tenants From Harassment
Legislation from Councilmember Adrienne Adams would place a $10,000 to $50,000 civil fine on landlords for threatening commercial tenants who have been impacted by the coronavirus pandemic.
According to the bill, commercial tenants impacted by the coronavirus would be added to a list of protected classes during the health crisis—included on a list of factors like age, race, or gender.
Councilmember Adams said during the vote, “As availability of federal loans is limited, many businesses are unable to pay their rent. This leaves them vulnerable to harassment from landlords looking to find ways to collect or to just get the tenant to voluntarily abandon the property so they can find tenants willing and able to pay those higher rents.”
The powerful real estate lobby, the Real Estate Board of New York, raised concerns with how harassment would be defined.
“With national retail chains paying only 58 percent of billed rent in April, our city’s economic engine can't afford unnecessary barriers that will make it more difficult for commercial property owners to work with smaller businesses to address their legitimate needs and concerns,” REBNY president James Whelan said in a statement on Wednesday.
A separate bill protecting residential tenants against harassment based on if they are impacted by COVID-19—like being an essential worker or for receiving a rent concession—also passed.
With Gothamist's David Cruz.