March 7, 2024 Third-Party Platform Regulations

Jersey City Ordinance

In late February, the Jersey City Council unanimously approved the introduction of Ordinance 24-008, aimed at amending Chapters 175 (Food Handling Establishments) and 242 (Peace and Good Order) within the Jersey City Code of Ordinances. This ordinance is set to implement comprehensive regulations for third-party delivery services and their associated food delivery drivers. Key provisions of this ordinance include the requirement for third-party food delivery platforms to obtain licenses and secure explicit written consent from restaurants before listing them on their services. It also mandates that these platforms offer restaurants the flexibility to either fulfill orders using their own delivery resources or opt for the delivery services provided by the third-party platform. Additionally, it empowers restaurants with the right to impose and collect delivery fees from customers, should they choose to do so.

The ordinance also introduces a structured tier system and establishes caps on fees to protect restaurants. Specifically, it prohibits delivery platforms from charging a restaurant more than 5% for orders that the restaurant delivers independently. In cases where the delivery platform facilitates the delivery, it is required to offer at least one service tier that does not exceed 15% of the order’s purchase price, maintaining the same delivery hours for services above this fee threshold. Crucially, the ordinance ensures that delivery platforms cannot manipulate visibility or search rankings of restaurants based on the tier they opt for or the fees they pay, guaranteeing a fair and transparent marketplace for all participants.

~Why it Matters~ 

This legislation introduces essential regulations on third-party delivery platforms, safeguarding restaurants from discriminatory practices based on their service tier selection. By outlining the constraints, the law aims to ensure equitable treatment across all tiers, prohibiting any variance in dispatch times, service prioritization, or customer access based on a restaurant’s subscription. This uniform approach is crucial in maintaining a fair and competitive environment, where service quality is not compromised by tier-based disparities.