Capping commissions

Hoboken council moves forward on legislation to aid small businesses

Legislation to cap commissions third-party delivery companies can charge may be adopted in Hoboken or across the state.
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Legislation to cap commissions third-party delivery companies can charge may be adopted in Hoboken or across the state.

The Hoboken City Council is scheduled to vote on a final reading ordinance that would cap the commission collected by third-party delivery companies, such as GrubHub and Uber Eats, at 10 percent during a declared State of Emergency, much like Hoboken’s neighbor, Jersey City, did last week by executive order.

But In Jersey City, the cap didn’t go over so well with the third-party delivery companies. Uber Eats began to charge residents a special fee called the “Jersey City Executive Order.”

Meaning any resident who used Uber Eats to place an order with a local restaurant and have it delivered would pay taxes, a service fee, a delivery fee, and also an extra flat fee of $3 as the “Jersey City Executive Order” charge.

Executive order fee

For those questioning the new fee on their receipts, the information tab on the receipt explains “A recent Jersey City executive order temporarily limits what Uber Eats charges restaurants to fulfill orders. To help keep delivery drivers on the road, a new charge is applied to orders from restaurants in Jersey City.”

In an email to customers, Uber Eats said the executive order limits its ability to cover the cost of delivery and “forced us to make several changes” in order “to protect earnings for delivery people.”

The company also said, “food delivery orders from Jersey City restaurants may become less reliable. For example, we may need to shorten the distances we can deliver to.”

“Whether it’s exploiting their Uber drivers or Uber exploiting local restaurants by squeezing their margins, Uber continues to show that as a multi-billion-dollar company they care very little about working people, even in a pandemic,” said Jersey City spokesperson Kimberly Wallace-Scalcione. “As a city, our administration will work with the City Council and we won’t back down. Instead, we will continue to amend and strengthen our policy until Uber stops their predatory ways against working people.”

Upon seeing the Uber Eats email on social media, Mayor Steven Fulop tweeted, “Uber is just a terrible company that only cares about corporate profits. It’s really ‘special’ how they send an email pretending to care about protecting their workers when their entire reputation as a company is based on exploiting working people. Bottom line is we hope people order direct from the restaurants for delivery (best option) or another delivery platform that actually cares for a local economy. There are plenty of choices and there is no reason to rely on Uber which is a company that embodies EVERY bad character trait in corporate America.”

Uber spokesperson Harry Hartfield told media that adding the surcharge was a tough decision and “the fee will only apply to Jersey City restaurants, so customers in Jersey City can still order from surrounding areas to avoid the additional cost.”

Hoboken Councilman Michael DeFusco said, “I think what we’ve seen exhibited by third-party delivery companies is the essence of corporate greed,” noting that he viewed it as an attempt to intimidate local leaders to scale back similar legislation by “threatening an additional tariff on consumers.”

“If no small businesses are here to sell locally, how will they get their 30 percent tariff they are looking for?” DeFusco said.

Meanwhile, on Thursday May 15 similar legislation moved forward in Trenton as the State Senate approved Senate Bill 2437 which would cap the fees third-party deliver companies could charge during the pandemic. The legislation, if adopted, would cap fees at 20 percent of the order, or 10 percent if the company does not make a delivery but the order is instead picked up or delivered by the restaurant.

“I’m really happy we started a conversation here in Hoboken, and it quickly made its way to the golden dome for the betterment of our entire state,” DeFusco said.

He said should the legislation be adopted by the state, he will pull back the Hoboken ordinance but he and Council President Jen Giattino are moving forward with other legislation which they say will also help businesses impacted by the pandemic.

Supporting small businesses

The pair will sponsor two introductory ordinances on May 20. The first will will revise the uses for the unused kiosks on Pier A. Last summer, the council adopted an ordinance to reactivate the existing kiosks along the waterfront. The new proposed amendments would give the Hoboken Business Alliance the authority to immediately use these spaces.

The second piece of legislation would temporarily change zoning to allow small businesses, food trucks, and other retailers to use designated parking lots as a temporary retail space for popup shopping and dining.

“Hoboken’s small businesses are the backbone of our community and we must do all we can on the legislative level to help them succeed in the new era of social distancing,” said the two council members in a joint statement. The time will soon come where stay at home orders are lifted, but businesses will need all available resources to adapt to new capacity and operating regulations. We’ve already laid the groundwork to reactivate kiosk use on Pier A and now, there has never been a greater need for outdoor retail and dining options.

“By opening these kiosks and additional lots throughout our city to small businesses, we’re expanding their ability to operate without being confined to brick and mortar retail space. The small businesses legislation we’ve proposed on the City Council has already paved the way for the administration to work with us to ensure our local economy recovers and mom and pops continue to call Hoboken home for decades to come.”

Both pieces of legislation are up for first reading at Wednesday night’s virtual Hoboken City Council meeting at 7 p.m., as is a final reading of an ordinance they sponsored which if adopted will amend the city’s existing sidewalk cafe regulations.

The amendment will allow qualified businesses to build temporary platforms in the parking spots directly in front of their establishments to use as outdoor dining areas. It will also allow businesses across the street from municipal parks to extend seating to the sidewalk directly in front of the park.

To watch the virtual council meeting live go to https://www.facebook.com/Hoboken/

For updates on this and other stories check www.hudsonreporter.com and follow us on Twitter @hudson_reporter. Marilyn Baer can be reached at Marilynb@hudsonreporter.com.