Gotham Gazette Sun, 17 Jan 2021 22:55:39 +0000 Joomla! - Open Source Content Management en-gb (Webmaster) Getting New York City's Events Industry Up and Running Again versa nyc outdoor

When can event spaces come back in New York City? (photo: VERSA)

The future is coming into focus. New York City is starting to reopen, and officials are releasing specific guidelines on how different industries can get back up and running, such as regulations for outdoor dining. Empty middle seats and temperature checks are clearly in the future for airlines. 

But what about the events industry, which brings in $10 billion and employs approximately 500,000 in the State of New York? As CEO of the Backal Hospitality Group, I’ve seen first-hand how the events industry in New York City has been utterly flattened by the coronavirus. While restaurants have been able to pivot to offer takeout, curbside pickup, or delivery when New York first went on “pause,” and airlines are still able to fly throughout the past few months, the events industry has come to a complete halt, the hardest hit among businesses based on the idea of bringing groups of people together. 

With all the daily announcements from Albany, it is still unclear which of the four reopening phases will allow events to restart. 

Backal Hospitality Group employs up to 200 individuals and creates corporate events, fundraising galas for not-for-profits, and social gatherings. We cannot fall between the cracks (or phases). The many thousands who count on the events industry for their incomes are eager to get back to work and want to do so safely. How do we rebuild?

Following the recommended guidelines for health and safety protocols from officials, those of us in the industry need to be proactive, creative, and aggressive in coming up with solutions ourselves; ideas that will preserve the appeal of what we offer while making customers feel safe because they are safe. It might seem like an impossible task, but it’s not. 

First, we will have to accept that our events may look different in the beginning. We must adapt, even if it brings some temporary financial pain. For a time, our profit margins will be stretched if not eliminated, but at least we will be doing any business at all. We must recognize we are in this for the long run, and we will have to rebuild step by step slowly and steadily to get where we need to go and preserve our industry that employs everyone from independent florists to caterers to local entertainment to photographers and many more. 

If we smartly implement health and safety protocols for all events, which go hand-in-hand with the goals of elected officials, then we may avoid having our industry on hold for months longer, which would be devastating to the livelihood of thousands of New Yorkers. 

Here are some ideas:

Governor Cuomo has allowed groups of 25 to gather. It’s more than the original groups of 10 he authorized, but, since this still isn’t much of an event in terms of our industry, why not several groups of 25 in smaller, separated rooms? Would that be the basis for a socially-distanced evening or lunch?

In New Jersey and Connecticut, both governors are allowing larger groups, including Gov. Ned Lamont of Connecticut who may permit groups up to 250 by mid-July with social distancing protocols still in place. As Governor Cuomo has said before, I think the region should be unified on such regulations.

Could guests be brought into an event on a staggered and reserved timeline, cycling through and with thorough cleanings in between each group, so that the overall group never gets too large?

What is safer – sit-down dining or pass-around appetizers? And why not use one of the more elegant and simple dining systems ever conceived: the Bento box? These could contain multiple items for a single guest, and no passing them around. And they can be made quite beautifully. 

All servers will of course wear masks and gloves. A few months ago, this might have seemed strange, even alarming, but this is our new normal for the health and safety of all of us.

Then there is the great outdoors. Let’s take a cue from the restaurant industry.

Perhaps, before the pandemic, you had an opportunity to gaze down at the rooftops of Manhattan from a skyscraper. That landscape has changed incredibly in recent years. What was once a sea of black tar and AC units is now filled with gardens and decks and cabanas. Rooftop bars and restaurants abound, and there is a great deal of opportunity. 

A few years ago I became a managing partner and operator at VERSA Restaurant and Rooftop, which has an 8,000 square-foot outdoor area located in the Renaissance New York Midtown Hotel. It’s been closed for over three months. Summer is upon us. If the city and state have approved outdoor dining rules, they should apply to outdoor event spaces, too. We have the room to socially-distance our tables, and then some. 

And we have a far better view than you do from the street.

Arthur Backal is CEO of Backal Hospitality Group.

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Getting New York City's Events Industry Up and Running Again Mon, 06 Jul 2020 04:00:00 +0000
City Council to Pass Bill Capping What Food Delivery Apps Can Charge Restaurants, Sponsor Says images shot day

Restaurants are struggling to survive during the lockdown (photo: Benjamin Kanter/Mayor's Office)

As New York City’s mom-and-pop restaurants struggle to survive in lockdown conditions owing to the coronavirus pandemic, the New York City Council appears poised to help them cut costs by passing a bill to cap fees charged by third-party delivery services, which have proliferated in recent years via phone apps.

Small restaurants that cannot afford delivery workers or have recognized the popularity of the apps rely on the third-party services like Grubhub, Seamless (which is owned by Grubhub), DoorDash, and Uber Eats, which charge significant fees that eat into an establishment’s profits. Those fees, hidden from customers who use the services, can include charges for processing, delivery, and commissions, and can end up hurting, rather than helping a food establishment’s business.

A particularly harsh example made waves on social media when a pizza restaurant owner, Giuseppe Badalamenti, in Chicago posted details of a Grubhub invoice on Facebook. Orders that totalled about $1,042 over the month of March only netted him about $376 after Grubhub took its cuts. “Stop believing you are supporting your community by ordering from a 3rd party delivery company,” Badalamenti wrote on Facebook in a post that went viral.

Grubhub defended the fees in a statement to the Chicago Tribune. “Restaurant owners select the services they want and only pay a commission to Grubhub when we help generate sales. Grubhub is happy to work with restaurant partners to help them manage costs and grow their business,” the statement said.

Restaurant owners and trade associations in New York City have been complaining about the fees charged by the app-based delivery companies for some time, with the temperature significantly raised amid the coronavirus shutdown wherein restaurants are only allowed to offer delivery and takeout. “The third-party delivery platform situation was a crisis before we were in this crisis,” said Andrew Rigie, executive director of the NYC Hospitality Alliance, in testimony before a remote Council hearing on the bill on April 29. “What companies like Grubhub and Seamless are doing is using sophisticated techniques to basically extract as much money as possible out of businesses pre- and during this pandemic.”

The bill before the New York City Council, which its lead sponsor says will soon pass, will limit any fees charged by a third-party delivery service at 10% of the total purchase price of an online order.

The bill was introduced by Queens Council Member Francisco Moya in February, well before the coronavirus made it a far more urgent issue, and has since been amended to account for the pandemic. In the case of a declared public emergency, the bill limits delivery fees to 10% and prohibits any other fees. The law would go into effect immediately and carries a hefty $1,000 penalty for each violation. Moya told Gotham Gazette the bill will be voted on and passed at the next full meeting of the City Council, which was originally scheduled for May 5 but has been recheduled for May 13. "Yes," Moya said, when asked if the bill will be voted on and passed by the full Council (it will have to be passed in Council committee first).

A spokesperson for Council Speaker Corey Johnson declined to comment for this article.

When the outbreak began, Moya and others were somewhat optimistic that delivery service companies would come to the aid of small businesses. On March 13, Grubhub had announced that it would temporarily stop collecting commissions of up to $100 million, and set up a charitable fund for drivers and restaurants in several cities, including New York, San Francisco, Boston, Portland and Chicago, where the company was founded and is headquartered.

“Independent restaurants are the lifeblood of our cities and feed our communities. They have been amazing long-term partners for us, and we wanted to help them in their time of need. Our business is their business – so this was an easy decision for us to make,” said Matt Maloney, Grubhub Founder and CEO, in a statement at the time. 

But, as Badalamenti found out the hard way, Grubhub is still making a tidy sum off commission, delivery, and processing fees. His invoice also included charges for promotional services that he chose.

“There’s a word for things that feed off the lifeblood of others and that’s of course is leeches,” Moya said in a phone interview. “Grubhub is still coming after these [restaurants], and they’re gonna suck them dry if we don’t help level the playing field.”

He added of his district that includes Elmhurst, Jackson Heights, and Corona, “I represent an area where it’s a large immigrant community. These are small family-owned restaurants. They can barely afford to keep the doors open, let alone sustain the fees that they're being charged.”

Inquiries to Grubhub went unanswered. Harry Hartield, a spokesperson for Uber Eats said in a statement, “Restaurants have the option to choose different services at different commission levels. With Uber Eats, they can choose to pay a lower commission and pay for full-time delivery people themselves. Many restaurants don’t have the resources to do that and they choose to have Uber Eats cover all the costs and logistics of delivery. This law would simply shift the costs back onto small, local restaurants who can afford it the least.”

A DoorDash spokesperson made a similar argument, noting that the company has cut commissions in half for small restaurants as part of a $100 million effort at commission relief and marketing support. “Unfortunately, an arbitrary cap could limit the services we can provide to local restaurants and ultimately hurt couriers who need these work opportunities more than ever,” the spokesperson said.

The bill doesn’t yet make a distinction between those different types of arrangements. For instance, restaurants with their own delivery workers and those that rely on the service’s delivery workers would be subject to the same cap. Moya did say, however, that final negotiations about the bill are ongoing before it is passed, and that it could be tweaked to separate caps on delivery fees from caps on commission and processing fees. The bill has 14 co-sponsors so far in the 51-seat Council.

Moya’s bill is also part of a larger package of regulations regarding third-party food delivery services that were the subject of the remote hearing on April 29, held jointly by the Committee on Consumer Affairs and Business Licensing, Committee on Small Business, and Committee on Housing and Buildings. Other proposed measures include requirements for disclosure to consumers of the fees and commissions charged to restaurants as well as requiring a license from the Department of Consumer and Worker Protection, among other bills.

Bronx Council Member Ritchie Torres said on Twitter the bills aim to “protect struggling restaurants from outrageous fees from food delivery apps & to ensure delivery workers receive their well-earned tips in full. We must protect restaurants so they’re able to return & thrive."

In the virtual hearing, Amy Healy, a Grubhub representative, called the bills an example of “government overreach.” Brooklyn Council Member Justin Brannan pushed the company to voluntarily commit to a fee cap, but the company said that would force it to operate with losses. “Restaurants may have been deemed ’essential’ during #COVID19 but it ain't peaches & cream. They are all struggling to make ends meet with take-out & delivery as their only means of staying afloat. NYC must institute an emergency 10% cap on all delivery apps,” Brannan tweeted.

Other proposed measures include requirements for disclosure to consumers of the fees and commissions charged to restaurants as well as requiring a license from the Department of Consumer and Worker Protection, among other bills.

“[M]y agency and administration, generally we agree with the issues that the Council is trying to address with these bills,” said DCWP Commissioner Lorelei Salas, a de Blasio appointee, at the hearing. “Given the ongoing emergency and fiscal situation, it would be challenging for us to contemplate taking on a broad area of new regulation. With that said, we want to work with the Council to figure out the best pathway forward and what we can do to help small businesses that most need this help right now.”

by Samar Khurshid, senior reporter, Gotham Gazette

Read more by this writer.

Note - this article has been updated to note that the next full Council meeting has been rescheduled for May 13. 

City Council to Pass Bill Capping What Food Delivery Apps Can Charge Restaurants, Sponsor Says Sat, 02 May 2020 04:00:00 +0000
Don’t Let Airbnb Fool You apartment building east harlem

photo: Sofie Hecht/Gotham Gazette

If you are to tell a lie, make it a big one and repeat it often, is a mantra of many an absolutist regime. Alas, that applies all too often to many businesses. Few epitomize that dictum better than the illegal hotel rental platform Airbnb.

That certainly was the conclusion of a recent, well-researched editorial in the San Francisco Public Press, an independent non-profit focused on local news. The authors concluded: "Fear, disinformation, deception. That’s what San Francisco voters were bombarded with last fall through record-setting, multimillion-dollar TV advertising crafted to crush progressives, defeat restrictions on short-term rentals and reshape the city’s housing map for decades to come.”

The giant tech unicorn is looking for an encore in New York as it faces a sharp curtailing of business in the state, especially New York City, if Governor Andrew Cuomo signs a bill that imposes significant penalties on listings of illegal hotels. Airbnb has put out an avalanche of advertising in Albany and New York City along with pressure from big names like Peter Thiel and Ashton Kutcher, both of whom are early investors in the company.

The narrative, risible to all but the uninitiated, suggests that the ill-intentioned hotel industry is behind the legislation that would boot hundreds of middle class families from their homes on account of their inability to meet mortgage payments without income from renting out their “spare” rooms. In fact, entire apartments, floors, and buildings without any of the mandated attributes of hotels, such as access for the disabled or fire-protection safeguards, are being converted to illegal hotels. There are good, important reasons that hotels are regulated as they are and pay the taxes that they pay.

That so many illegal Airbnb hotels are in the city center area shows as a lie that the company’s business model is reviving the outer boroughs.

A glaring inequity is that real estate and income tax subsidies meant to spur homeownership are being used to gain an unfair competitive advantage over hotels. Unsurprisingly, in New York City a good deal of the illegal transient occupancy growth has occurred in rent-regulated buildings with many beneficiaries of rent regulations quickly snapping up the online arbitrage opportunity by extracting market value for their "ownership" of prime real estate.

An oft-repeated bromide of Airbnb points to their model allowing for better utilization of resources by using homes as hotels. Perhaps. But why not then use dining rooms at homes as restaurants and bars, and conference rooms in offices as banqueting halls? Why not allow private pilots to take on paying passengers in empty seats? The answer is obvious except to those who deliberately refuse to acknowledge it.

Airbnb’s New York City “inventory” now exceeds 20 percent of the total number of hotel rooms. That only underscores the fact that a majority of their rentals are illegal. That the transient lodging industry employs over 50,000 people in New York City alone and has been a pillar of stability during the Great Recession ought to put the “debate” about Airbnb’s spurious claims to societal benefits to rest. But a model where success is predicated on illegality will stop at nothing to ensure its continuity.

With the signing of new regulations by Governor Cuomo, order will be restored to what is now a dangerous, abusive industry that is out of control.

Vijay Dandapani is Chair of the Hotel Association of New York City. On Twitter @dandipanivijay.

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Don’t Let Airbnb Fool You Mon, 29 Aug 2016 04:00:00 +0000