Risky Business: Delivery That Is

Originally Published : March 20, 2020

You all know that we love you and want you to succeed but, we are your LAWYERS after all so it’s our job to look at what you’re doing, analyze the risk, look at the law and then warn your asses.  So, while we are all gung ho about you delivering like the wind and making that money, you have to do it the right way or, later down the line, you will have to pay the piper.  And I hate that damn piper because he almost always gets paid and, of course, because of the flute.

Rays of Sunshine:

Let start off with some glimmers of good news. 

Sales Tax.  Deferred until July.  Should have been a gimme but they had to take it to the opening bell.  At least they did and saved us some money.  We’ll take it.

SBA Disaster Loans.  Now available online so you can apply.  Helpful if you are a lifetime bureaucrat or a monk or Job.  What’s the opposite of intuitive?

Essential Services.  Some respect.  Food delivery counts as an essential service.  So do liquor stores. Priorities.

Stimulus Package.  As of today the United States Senate is negotiating a stimulus package that, in its current form, will include small business loans for employers of 500 or fewer employees. The bill will add another $299.4 billion to the SBA’s budget and will increase the types of institutions that are allowed to lend under this program. Current news out of Washington D.C. is that the Senate hopes to vote on the bill on Monday, March 23, 2020. If approved, the bill will then go the President to be signed into law. We will keep you informed on all of the developments as this bill takes form.

Since so many of you are doing delivery and it’s only going to get busier on that front, let’s get legal please.

Delivery by Joe Taylor, Esq. – HL Litigator
Protect Your Neck

Whether you have an established delivery service, or are starting fresh, it is important to be mindful of the potential liabilities inherent in providing delivery services. Especially right now, delivery services must be a revenue stream and not a source of liability, so here are a few important tips and notes.

Personal Car Insurance Will Not Cover Your Business!

Automobiles used for delivery services require commercial insurance coverage, which can be obtained directly by the vehicle owner, or if the car is not owned by the business, through a “Hired & Non-Owned” (“HNO”) policy endorsement. The last thing anyone needs right now is an uncovered personal injury claim, so please check with your delivery drivers and insurance broker to ensure you have the necessary coverage. We are here to help and can put you in touch with a broker who can assist you right away.

Death, Taxes, and City Regulations…

Of course, the City of New York has a number of regulations governing the use of bicycles for delivery services, which they define as commercial bicycles. Thankfully, the City also provides a lot of useful information on how to comply with these rules, which you can find here. This includes City-approved, printable templates for the required rosterbusiness card, and placards. While we hope the City will relax its enforcement of these regulations during these difficult times, it is best to ensure that your business is in compliance with the regulations to avoid the risk altogether.

Record Keeping

Each business must maintain a roster that includes the commercial bicycle employee’s:

  • Full name;
  • Residential address;
  • Three-digit ID number (to be created by the business and unique to each employee);
  • Date of hire (and discharge); and
  • Confirmation that the employee completed the City’s free Commercial Bicyclist Safety Course, which can be found here.

Additionally, you must provide each commercial bicycle employee with a business card that the employee must carry with them when making deliveries.


As noted above, each commercial bicycle employee must complete the City’s free safety course. Additionally, each commercial bicycle employee must have a safety helmet and reflective upper-body apparel (jacket/vest) that lists the business’s name and the employee’s three-digit identification number on the back.

Lastly, the City requires each bicycle be equipped with:

  • A bell or other audible device;
  • White front light and red taillight;
  • Reflectors on the sides of both wheels;
  • Brakes; and
  • A metal or plastic sign affixed to the rear of the bike, or on both sides of the bike, with the employee’s three-digit identification number.

Tools of The Trade: Wage Considerations

Both the FLSA and New York Labor Law allow you to require your delivery employees provide and maintain their own “tools of the trade” (automobile, bicycle, safety equipment), provided that the amortized weekly cost to the employee, when deducted from their weekly wages, does not reduce their wages below the required minimum or overtime wage. These costs can include the cost to purchase a bicycle, if it was required. Additionally, Courts in New York have previously held that $500 per year (or approx. $9.62/week) for bicycle maintenance is reasonable. While there is no steadfast rule on calculation costs related to the use of an automobile for delivery, the IRS standard business mileage rate is a reasonable approximation of such costs. Note that if you require your delivery driver to obtain commercial automobile insurance, that cost will also be included.

Remember, there is no violation unless the weekly expenses reduce the weekly wages below the required minimum or overtime wage. Importantly, tips and per-delivery wages will defray the costs and help avoid any potential violations. To further protect yourselves from the risk of future liabilities, we recommend- where possible- purchasing delivery bicycles and required safety equipment and providing them to your delivery employees. To the extent you require your delivery employees to provide their own vehicles and safety equipment, be sure to get copies of receipts for the purchase of any bicycle and safety equipment. As for automobiles, we recommend keeping a log of the mileage covered by each employee while providing delivery services.

And since we still all need money, we are going to keep following the loans and other programs:

SBA FEDERAL DISASTER LOAN – Ryan, Andrew and Abigail
As many businesses struggle to cope with the financial ramifications of the coronavirus, the Small Business Administration (SBA) has reacted by offering low-interest Federal Disaster Loans for businesses in industries substantially affected by the outbreak. Gil Goldberg, director of the Cleveland District Office of the SBA, specifically mentioned the food service industry as an example of the types of industries for which this federal relief is intended.

What are the terms of this loan?

The federal disaster loan program will offer loans of up to $2 million.

The interest rate for small businesses will be 3.75% which is, comparatively speaking, quite low.  The vast majority of restaurants will qualify as a ‘small business’ under SBA standards, and that measurement is based on gross receipts or number of employees depending on the specifics of your business. You can confirm whether your business qualifies as a ‘small’ business by SBA standards here: https://www.sba.gov/document/support–table-size-standards

In an effort to offer meaningful relief, the SBA is offering extended repayment periods for these loans, up to a maximum of 30 years.

The exact amount terms of each loan will be determined by the SBA on a case-by-case basis based upon the borrower’s ability to repay.

What can I do with the loan proceeds?

The SBA isn’t attaching many strings here, provided that you use the loan proceeds for the sole benefit of the applicant business. The SBA has stated that loan proceeds may, for example, be used to pay fixed debts, payroll, accounts payable, and other bills that can’t be paid because of the disaster’s impact

How do I apply?

You can apply for these loans online through the SBA website at: https://disasterloan.sba.gov/ela/.

What application materials will I need?

As of Friday, March 20, 2020, the SBA is requiring applicants to submit and complete the following types of forms and questionnaires, among some other representations and warranties. We would recommend working closely with your accountant on this process.

Note that personal information is required to be submitted on behalf of each owner of 20% or more of the applicant entity, and for each manager, managing member, director, or general partner (i.e., a ‘controlling person’) of the applicant entity.

What if I have questions?

While we are available to advise you to the extent we are able, you may contact the SBA directly with any questions by phone at 1-800-659-2955, or by email at [email protected].

What other loan options are available?

As of Friday, March 20, 2020, the United States Senate is rapidly negotiating a stimulus package that, in its current form, will include small business loans for employers of 500 or fewer employees. What these loans will look like is still unknown. Current news out of Washington D.C. is that the Senate hopes to vote on the bill on Monday, March 23, 2020. If approved, the bill will then go the President to be signed into law. We will keep you informed on all of the developments as this bill takes form.

Please note that the above information is subject to change, as the federal offerings and circumstances surrounding this crisis are changing, and will continue to change, quite rapidly.

Is it the weekend?  Does it matter anymore?

Well, in any case, Keep on truckin’ and hang in there.


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