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May 23, 2024 • Third-Party Platform Regulations

Jersey City Ordinance 24-037

On May 22nd, the City of Jersey City, N.J adopted a new ordinance to establish regulations for third party delivery companies and food delivery drivers, which passed 7-1. The ordinance will take effect August 1 and will ensure hundreds of restaurants have protections while utilizing food delivery apps. Councilman Solomon, who authored the bill said “this is the foundation to address concerns and create as level a playing field as we can when the three big companies control the market”. After hearing from several restaurant operators at the public hearing, he said “you guys are so important to our community, you create jobs, you bring vitality, and we need to see you thrive and this is sort of a basic step we can take to help you keep more of your hard earned profits.”

The ordinance includes the following provisions and protections:

  • Agreement Between Restaurant and Delivery Platform: The ordinance requires a formal agreement between restaurants and delivery platforms, allowing restaurants to use all platform services without delivery required. The agreement must outline the fee or commission charge to the restaurants for this option, the allocation of delivery fees charged to the customers between the delivery platform and restaurant and how delivery responsibilities are allocated
  • Fee Cap: The delivery platform cannot charge more than 5% of the purchase price of an order, though this cap does not apply to advertising, SEO, consulting, or credit card processing fees and does not apply when using the delivery service.
  • Tiered Service Levels: The ordinance mandates that delivery platforms must offer at least one tier for core delivery at or below 15%. Core delivery includes listing, making restaurants discoverable on website, app and internet service and facilitating and performing delivery.  Core services do not include advertising, SEO, business consulting and credit card processing
  • Search Results Transparency: Delivery platform cannot omit or hide a restaurant from relevant search results based on core delivery service selection (Tier 1 selection)
  • Uniform Dispatch Times: No tier may offer differing dispatch times or priority
  • Delivery Radius: All tiers must have delivery radius of at least 1 mile from restaurant in city limits