Mamdani Administration Acts to Protect Immigrant Restaurant Owners From Delivery App Junk Fees

 

Mayor Mamdani, Commissioner Levin Secure Restitution for More Than 380 NYC Businesses Overcharged by HungryPanda  

Today, Mayor Zohran Kwame Mamdani, Deputy Mayor for Economic Justice Julie Su and New York City Department of Consumer and Worker Protection (DCWP) Commissioner Samuel A.A. Levine announced a settlement of more than $875,000 with HungryPanda to resolve violations of the City's Third-Party Food Delivery Service Laws.   

  

The investigation found HungryPanda violated New York City’s Fee Cap Law, in some cases charging immigrant-owned restaurants thousands of dollars in illegal junk fees. The action marks the first time DCWP has enforced the law against a delivery app company for harming business owners.   

  

“Too many neighborhood restaurants are already navigating high costs and razor-thin margins,” said Mayor Mamdani. “They should not also have to contend with hidden, illegal fees from the apps they rely on to reach customers. This settlement returns money to the businesses that were overcharged and makes clear that New York City will enforce the law to protect small business owners.”   

  

“HungryPanda counted on these restaurant owners being too small and too busy to fight back,” said Deputy Mayor for Economic Justice Julie Su. “They were wrong. This settlement puts money back in the pockets of hundreds of immigrant-owned businesses, and it's a clear message to every platform in this city: we are watching the fine print.”  

  

“Restaurants are the heart of every New York City neighborhood, bringing people together, keeping us fed and creating a thriving economy,” said DCWP Commissioner Sam Levine. “The Fee Cap Law was enacted to protect these small businesses from predatory fees that make operating in New York City difficult. This settlement lets it be known that DCWP will not allow HungryPanda, or any other delivery app for that matter, to rip off consumers, workers, or small businesses.”  

   

HungryPanda, a third-party delivery platform used predominantly in New York’s Asian immigrant communities, will pay more than $580,000 in restitution to more than 380 restaurants citywide, along with more than $294,000 in civil penalties and fees.   

  

DCWP found the company used a range of tactics to impose unlawful charges, including bundling multiple fees into a single line item, frequently relabeling fees and mischaracterizing illegal overcharges as “promotion deductions.”  

  

Under the settlement, HungryPanda must comply with the Fee Cap Law, provide clear fee disclosures to restaurants, implement internal compliance policies and training and submit annual certifications attesting to compliance.  

  

DCWP enforces New York City’s Third-Party Food Delivery Service Laws, which cap fees charged by delivery apps and protect restaurant owners. The caps are:  

•    15% for delivery services  

•    5% for basic services, including order processing and platform listing 20% for enhanced services (only if a basic service is offered at or below 5%)  

•    3% for electronic payment processing (with limited exceptions if higher costs are documented)  

 

Earlier this year, HungryPanda was part of a $5 million settlement alongside Uber Eats and Fantuan that secured restitution, penalties and damages for more than 49,000 delivery workers for violations of the City’s Minimum Pay Rate.   

  

This case was handled by DCWP staff counsel under the supervision of senior agency leadership.