Food delivery stocks aren’t doing so hot on Friday after New York City passed a new measure affecting their charge rates for restaurants.
NYC has made it so that food delivery companies are only allowed to charge up to 23% for their service, which is hitting some stocks today. This breaks down into 15% for the delivery service, 5% for other add-ons, such as marketing, as well as 3% for transaction fees.
It’s worth noting charge restrictions were already in place due to the novel coronavirus pandemic but weren’t permanent until now.
Let’s see how food delivery stocks are reacting to the news below.
Food Delivery Stocks on the Move
- Just Eat Takeaway.com (NASDAQ:GRUB) stock is getting hit the hardest today as shares of the Grubhub parent company fall 7.5% as of Friday afternoon.
- DoorDash (NYSE:DASH) also isn’t performing well today as shares of its stock fall about 1.3% on the NYC charge news.
- Uber Technologies (NYSE:UBER) closes the food delivery stocks up almost 1% as its larger ride-sharing service protects it from the larger brunt of the news.
Of course, food delivery companies don’t plan to take this change sitting down. GrubHub said the following in a quote obtained by Financial Times.
“This permanent price control is flagrantly unconstitutional and will hurt local restaurants, delivery workers and diners across NYC. We will vigorously fight this illegal action.”
There’s no doubting that this charge change will end up affecting earnings for food delivery companies, but we’ll have to wait until future earnings reports come out to see how badly.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
