New York City App-based Food Delivery Platform Fee Cap Law: HungryPanda Merchant FAQ

New York City App-based Food Delivery Platform Fee Cap Law:

HungryPanda Merchant FAQ

Industry Regulatory Developments and HungryPanda’s Approach

Key Points

• HungryPanda disputes claims that the commissions it charges merchants exceeded the applicable fee cap under the city’s fee cap law.
• This matter reflects an industry-wide issue stemming from the evolution of New York City’s fee cap regulations, which govern all third-party delivery platforms operating in the city.
• The recent development with the city concern nuanced questions regarding how merchant-funded promotions, consumer subsidies, and related costs are treated in calculating the applicable fee cap limits.
• HungryPanda has engaged constructively with regulators and reached a settlement to establish a clear and definitive resolution.
• Merchants eligible to receive distributions under the recent settlement are not required to submit applications for such distribution. All related processes will be administered through a designated third-party settlement administrator.

Background

In 2020, New York City introduced a temporary 20% cap on fees charged by third-party delivery platforms to support restaurants during the COVID-19 pandemic. This cap was subsequently raised to 23% in late 2021 and made permanent.

Since the policy’s introduction, interpretations and practices have varied across the industry with respect to fee structures and the treatment of promotions and subsidies. Major platforms, including Uber Eats and DoorDash, challenged the policy through litigation, with their respective matters reaching resolution in 2025.

New York City later introduced additional provisions permitting platforms to charge up to an additional 20% for optional enhanced services—on top of the 23% core services fee cap—bringing the total allowable fee cap to 43%.

Operating within this evolving regulatory environment, HungryPanda elected to engage constructively with the New York City Department of Consumer and Worker Protection (DCWP) and reached a settlement to resolve the matter. This approach was designed to reduce uncertainty and allow both merchants and the platform to return to normal operations as promptly as possible.

Frequently Asked Questions

1. Is this an issue unique to HungryPanda?

No. All third-party food delivery platforms operate under the same regulatory framework in New York City. Their responses may have varied based on their respective business models:

• Major platforms such as Uber Eats and DoorDash challenged the policy through litigation and subsequently reached settlements.
• HungryPanda engaged constructively with regulators and reached a settlement.
• Some platforms may remain under ongoing regulatory review or have not publicly disclosed their outcomes.

The above reflects an industry-wide issue arising from the evolution of the regulatory framework—not a platform-specific case.

2. Did HungryPanda violate the NYC fee cap?

HungryPanda disputes claims that its merchant commissions exceeded the applicable fee cap. The recent settlement was reached without a judicial determination through working constructively with regulators.

The matter concerned how merchant-funded promotions, consumer subsidies, and related discount costs are treated in the calculation of fee cap limits—an area involve nuanced interpretations and practices have varied across the industry. This reflects a broader question of regulatory interpretation, not an isolated compliance failure.

3. Why is HungryPanda required to compensate certain merchants?

The compensation stems from a regulatory settlement and represents a final negotiated resolution of historical differences in how fee calculations were approached. It should not be construed as evidence of a systemic issue with the company’s business model. HungryPanda disputes that it charged commissions above the applicable cap.

HungryPanda chose to resolve this matter through settlement in order to avoid protracted legal proceedings, eliminate ongoing uncertainty, and provide eligible merchants with a clear and timely outcome.

4. Why did HungryPanda choose to settle?

HungryPanda believes that settlement represents the most responsible path forward—for merchants and for the platform’s long-term growth. Settlement provides merchants with a clear, actionable resolution while enabling the company to redirect resources toward core operations: product improvements, merchant support, consumer experience, and operational excellence, rather than extended regulatory disputes.

Among platforms subject to the same regulatory framework, HungryPanda is among the first to achieve a clear and definitive resolution.

5. Who is eligible to receive distribution from the settlement, and how is it determined?

Eligibility, the identification of specific merchants, and distribution amounts are determined by the DCWP based on relevant records. Merchants are not required to take any action to seek distribution.

6. Do merchants need to apply, and when will payments be made?

No application is required from merchants. Notifications and payment distribution will be administered by an independent settlement administrator.

No authorized third parties are involved in this process. Merchants are advised to rely solely on official communications and to verify the source of any information they receive. Be mindful of sharing account details, identification, or banking information with any unofficial sources, and exercise caution with any suspicious communications.

7. What are the current regulations in New York City?

The core commission fee caps in New York City remains at 23% in total. Platforms may additionally charge up to 20% for optional enhanced services, bringing the total allowable fee structure to 43%.

• Core services fee caps in aggregate: 23%
• Optional enhanced services: up to 20%
• Total allowable fee structure: up to 43%

Regulations in this space continue to evolve. Under the current framework, compliance depends not only on fee levels, but also on the clarity of fee structures, transparency in merchant-facing communication and service offerings.

Our Commitment to Merchants

HungryPanda has always regarded its merchants as valued partners in our long-term growth. Over the years, we have been steadfast in supporting overseas Chinese and Asian restaurant businesses—helping small and medium-sized merchants generate online orders, increase visibility, and expand their customer base, while providing sustained operational support through periods of significant industry change.

The recent matter does not diminish HungryPanda’s commitment to its merchant community. To the contrary, by resolving this issue promptly, the company aims to further strengthen its compliance capabilities, enhance fee transparency, and improve the quality of service it delivers.

Looking ahead, HungryPanda will continue to:

• Strengthen compliance and governance frameworks—embedding rigorous compliance practices into day-to-day operations.
• Enhance merchant support capabilities—delivering more comprehensive business solutions through delivery, supply chain, and adjacent services.
• Build a trusted, long-term platform—grounded in transparency, accountability, and sustainable growth, in service of merchants, consumers, and the broader community.