New York and San Francisco are moving to make commission caps for delivery platforms permanent; NYC voted to approve a 23% cap, below the 30% usually charged
Dave Lee / Financial Times : Tweets: @toddntucker Tweets: Todd N. Tucker / @toddntucker : Price caps! “We really have an imperative to protect independent restaurants from the exploitive and predatory practices of third-party food delivery apps that seek to extract wealth from our local economy,” said San Francisco supervisor Aaron Peskin. https://www.ft.com/...
Context & Ripple Effects
The commission cap began as emergency pandemic policy: in April 2020 the SF mayor capped delivery commissions at 15% to shield restaurants from apps charging around 30%. New York followed with its own package of platform restrictions, including an extended commission cap through February 2022.
What changes now is durability: both cities are converting temporary price controls into standing law, with NYC's Council approving a 23% cap — still below the ~30% platforms normally charge. The move matters because the industry has already shown how it responds: DoorDash added supplemental local fees in 57 of 68 capped markets, and DoorDash, Grubhub, and Uber Eats went on to sue NYC over the cap law.
First-order effects
- Restaurants on DoorDash, Grubhub, and Uber Eats in both cities keep roughly 7+ points of every order that previously went to the platform, directly cutting the apps' per-order take.
- The platforms lose their strongest legal argument for relief — caps were framed as temporary emergency measures — once cities like NYC vote to make them permanent.
Second-order effects
- Expect the fee-shifting playbook already documented at DoorDash — supplemental local fees layered onto customers in most capped markets — to expand, moving the cost burden from restaurants to diners while headline commissions stay capped.
- The platforms' lawsuit against NYC becomes the template response in both cities, testing whether courts will treat a permanent take-rate ceiling as legitimate regulation or government overreach.
Third-order effects
- If permanent caps hold up in court, third-party delivery economics restructure around a regulated platform take rate, with profitability pushed toward customer fees, advertising, and subscription products rather than restaurant commissions — a shift the eventual 2021-lawsuit settlement between DoorDash, Uber, Grubhub, and NYC suggests the platforms ultimately accommodate rather than overturn.
- Other large cities gain a proven playbook: once the two biggest US markets normalize capping commissions below 30%, the political cost of following drops for city councils everywhere.
The trend: Food delivery is entering an era of permanently regulated platform take rates, with cities converting pandemic-era emergency caps into standing law and platforms absorbing the change through customer fees and litigation.