New York’s two-year-old law requiring local businesses to accept cash is seeing a new test, this time from the fast-delivery groceries that flooded neighborhoods in the pandemic age, city officials say.

The ban against cashless businesses was instituted in 2020 to counter restaurants and “fast casual” establishments like Sweetgreen, which lawmakers said at the time discriminated against low-income consumers, who are less likely to have a credit card or bank account.

Increasingly, however, elected officials are turning their attention to a wave of fast-delivery groceries and mini-warehouses operations. A spring survey by Councilmember Gale Brewer’s office showed the vast majority – better than 8 in 10 – don’t accept cash, even though some also function like traditional groceries.

Brewer said the city is failing to regulate this growing industry, one that is backed by venture capital and has been hyped in national media as the future of post-pandemic commerce. She complains the businesses, sometimes referred to as “dark stores,” flout other city laws, such as pricing-display rules, governing the commercial sector.

“There is no proactive inspection,” said Brewer, taking aim at the Department of Consumer and Worker Protection. “That makes me livid.”

I should not have to give my name and all my data just to buy an ice cream cone.

Jeff Strabone, Brooklyn resident

In a statement, DCWP spokesperson Abby Lootens said the agency was “actively enforcing” the ban on cashless establishments, including those pertaining to “dark stores,” also known as micro fulfillment centers.

“We have and continue to welcome complaints from the public, including elected officials, about specific locations that are violating this law, including Micro Fulfillment Centers," Lootens said. The office declined to make someone available to answer further questions about its enforcement efforts and serial violators.

‘Classist and elitist’

The city council overwhelmingly passed the ban on cashless establishments at a time when other city and state governments, including San Francisco, Philadelphia, New Jersey and Massachusetts, were enacting similar bans. Citing 2019 data, DCWP found that more than 300,000 New York households had no bank account, and those residents were more likely to be poor, unemployed and Black or Latino.

According to the DCWP, the city has received 537 complaints about businesses not accepting cash since the ban was instituted (by comparison, there were 878 complaints about used car dealerships in 2021 alone). The no-cash complaints include 37 against Van Leeuwen Ice Cream, which has been widely criticized for continuing to remain cashless even as it incurs thousands of dollars in fines – $1,000 for the first violation and up to $1,500 for subsequent violations.

“It’s such a classist and elitist way of running a business, but I guess Van Leeuwen would rather pay the fine of breaking NYC law rather than pay whatever fees come with taking cash,” said Saoirse Dempsey, a 20-year-old college student who tried -- and failed -- to pay with cash at a Van Leeuwen ice cream shop in Greenpoint in June.

“A good portion of my friends get paid in cash,” she added in a text, “not even to mention the multitude of houseless people in NYC that only have access to cash.”

Van Leeuwen representatives did not respond to requests for comment. Cashless businesses, particularly at the dawn of the COVID-19 pandemic, have touted the health benefits of “touchless” transactions, and also the safety, security and savings of not having to handle cash.

Proliferation during COVID

According to the survey conducted by Brewer’s office, 83% of new fast-delivery stores didn’t accept cash, and nearly three quarters had windows that were completely or mostly covered, blocking a view of the store interior, in violation of a city ordinance.

The city's ban against cashless businesses excludes purchases made online, by phone or by mail. But Brewer’s office notes that some locations do business both ways – taking remote orders and conducting in-person transactions – and need to follow the law barring cashless businesses as well as other city ordinances. For example, these establishments must ensure that the price charged for an item matches the price displayed on a shelf.

The landscape of these fast-delivery groceries and micro fulfillment centers is still taking shape in New York, with big companies like Amazon as well as lesser-known ones, including Gorillas, Gopuff and Getir, leading the charge. They proliferated during the pandemic, taking off as more and more New Yorkers relied less on in-store shopping.

Another company, Brooklyn-based Fridge No More, currently promises on its website that its “cloud stores are located in the middle of your neighborhood,” but shut down in March once its Russian investors were hit by U.S. sanctions. It closely followed the closing of another Russian-backed company that offered fast deliveries to New Yorkers, Buyk.

In April, three staff members out of Brewer’s office conducted a survey of 48 MFCs across Manhattan, out of 115 citywide. These included seven establishments operated by Gorillas, a company that delivers groceries in New York, Boston and Chicago. None of the Gorillas establishments accepted cash, according to Brewer’s office, and six of the seven had windows that were completely covered, in violation of city zoning ordinances.

This week, however, a spokesman for Gorillas, Alex Gabriel, said in a statement, “We will continue accepting cash and providing an in-store shopping experience at all current and future stores.” Brewer’s office said it couldn’t confirm whether those stores have in fact begun accepting cash since the April survey.

‘Writing and screaming’

Councilmember Christopher Marte, whose father operated a bodega, is raising other concerns. He says the pandemic has caused numerous storefront vacancies in Chinatown and the Lower East Side, and worries that the small shops cannot stand up to the new fulfillment stores.

One location, on Eldridge Street, was formerly a general goods store run by a Chinese-American family but closed due to rent increases, according to his office, adding that the store has since converted to an Amazon facility. Amazon did not reply to inquiries regarding the establishment.

“Micro Fulfillment Centers and 15-minute delivery apps are trying to flip our immigrant neighborhoods into storage yards for Silicon Valley,” Marte said.

Meanwhile, Brewer said her office would continue “writing and screaming” about the Department of Consumer and Worker Protection “not doing their job” – including doing little to prompt enforcement of the ban on cashless businesses.

Others have cited privacy concerns about the shift to cashless operations.

“I should not have to give my name and all my data just to buy an ice cream cone,” said Jeff Strabone, a resident of Brooklyn and college professor.