New York legislation would ban black market restaurant reservation services

Joanna Fantozzi

The New York State Legislature just passed a bill, that if signed into law by state Gov. Kathy Hochul, would ban unauthorized third-party restaurant reservation platforms. The Restaurant Reservation Anti-Piracy Act would require restaurant reservation platforms to enter a written agreement with operators before listing available reservations online—essentially requiring resellers of popular hard-to-get restaurant tables to operate like OpenTable or Resy.

“Now, when diners do have the ability to dine out, they will no longer have to compete with predatory bots capturing reservations and reselling them at exorbitant prices,” Melissa Fleischut, president & CEO of the New York State Restaurant Association, said in a statement. “And restaurants will no longer be left with empty seats from unauthorized third-party reserved tables. This legislation supports restaurants, diners and the legitimate apps uplifting the hospitality industry.”

Restaurant reservation resellers are popular in major metropolitan areas with expansive food scenes like New York City. To stand a chance at snagging hard-to-get restaurant tables at the likes of Theodora, Carbone, and The Polo Bar, would-be diners will often turn to third-party restaurant reservation resellers, which snatch up these rare reservations and resell them at a hefty price tag (on top of a usually expensive meal out). This, of course, makes the hard-to-get dinner reservations even harder to secure unless you go through these “black market” platforms.

Related:Squarespace acquires Nick Kokonas’ reservations platform Tock for more than $400 million

In fact, according to articles on The New York Post and Business Insider, these third-party reservation resellers — which have often been compared to sporting event and concert ticket scalpers — can make nearly six figures snatching up and reselling hot restaurant tables. Apps like Appointment Trader are set up so people who are willing to pay a premium just to get into a popular dining venue can secure their spot. Restaurant resellers have divulged that their client lists are often comprised of a-list celebrities and the mega-wealthy who are willing to pay hundreds of dollars (or even thousands) just to get in the door.

This proposed bill has been popular with reservation platforms, OpenTable and Resy, which do not engage in reservation reselling:

“The passage of this bill is a meaningful one for restaurants and will help protect their bottom lines by reducing the 'no shows' caused by fraudulent reservations,” Debby Soo, CEO of OpenTable, said in a statement. “We are pleased to see New York take a strong stance to support its restaurants.”

Related:Here’s how restaurant reservations are changing in the wake of COVID-19

According to the proposed legislation, violators of this would-be crackdown on restaurant resellers would be charged up to $1,000 per violation, and any person who has been charged fees by a third-party restaurant reservation service may bring a civil action in court.

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