Mayor Zohran Mamdani, Deputy Mayor for Economic Justice Julie Su and New York City Department of Consumer and Worker Protection Commissioner Samuel A.A. Levine on Wednesday reached a settlement exceeding $875,000 with delivery platform HungryPanda to resolve violations of the city’s Third-Party Food Delivery Service Laws.
The agreement stems from a city investigation that found HungryPanda violated New York City’s Fee Cap Law by charging restaurants illegal fees, in some cases costing immigrant-owned businesses thousands of dollars. The enforcement action marks the first time the department has taken action against a delivery app company for harming restaurant owners under the law.
The settlement will return more than $580,000 in restitution to over 380 restaurants citywide. HungryPanda will also pay more than $294,000 in civil penalties and fees. The platform, widely used in Asian immigrant communities, used multiple tactics to impose unlawful charges, including bundling fees into a single line item, frequently relabeling charges and mischaracterizing overages as promotion deductions, according to investigators.
“Too many neighborhood restaurants are already navigating high costs and razor-thin margins,” Mamdani said in a statement. “They should not also have to contend with hidden, illegal fees from the apps they rely on to reach customers."
The case highlights increased scrutiny of third-party delivery services and their impact on small businesses, particularly immigrant-owned establishments that rely heavily on app-based ordering, officials said.
Many neighborhood restaurants operate on thin margins and depend on delivery platforms to reach customers, leaving them vulnerable to hidden and excessive fees that can erode already limited profits.
Under the settlement, HungryPanda must comply with the Fee Cap Law, provide clear fee disclosures to restaurants, implement internal compliance policies and staff training and submit annual certifications confirming compliance.
The Department of Consumer and Worker Protection enforces the city’s delivery service regulations, which cap fees at 15% for delivery services, 5% for basic services such as order processing and platform listing, 20% for enhanced services if basic services are offered within limits and 3% for electronic payment processing, with limited exceptions.
Fee caps were enacted to prevent delivery platforms from charging excessive commissions during and after the COVID-19 pandemic, when restaurants became increasingly dependent on online ordering.
Earlier this year, HungryPanda was also part of a separate $5 million settlement alongside Uber Eats and Fantuan, which secured restitution and damages for more than 49,000 delivery workers for violations of the city’s minimum pay rate law.
