Two New York lawmakers want to ban online restaurant reservation services

New York City’s 4 Charles Prime Rib is booked solid for weeks, which is as far out as the hotter-than-hot steakhouse takes reservations. But Alex Eisler can often get diners a table in just a few hours if they’re willing to spend hundreds of dollars before taking a bite of food.

The 19-year-old who just finished up his sophomore year at Brown University said he made about $85,000 in 1½ years selling reservations at New York’s top restaurants. He’s able to do so through third-party reservations websites such as Appointment Trader and Cita Marketplace, which, unlike their mainstream counterparts Resy or OpenTable, aren’t free or authorized by the restaurants to which they’re offering access. Eisler estimates he has made some 1,100 reservations at restaurants around the world and sold 771 of those for $110,000 before the website he uses takes its cut.

Two New York state lawmakers want to shut down those types of websites. This week, they introduced legislation that would ban third-party reservations services that book dining slots without the permission of restaurants. They say that the explosion of predatory services has driven up the cost of eating out for diners and hurt restaurants by making their reservation system less predictable.

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“It really just causes chaos for a restaurant,” state Sen. Nathalia Fernandez (D) told The Washington Post.

Representatives for Appointment Trader and Cita say they’re good actors fulfilling a demand that would otherwise be satisfied by potentially bad actors operating under the radar.

“They sell on the black market,” said Appointment Trader founder Jonas Frey. “It’s not a website, but there’s someone under the table who’s selling it.”

Late last year, New York Assembly member Alex Bores (D), who introduced a bill identical to Fernandez’s in his chamber, heard friends complaining about not being able to get restaurant reservations. Then, a couple of months ago, he said restaurant owners started grumbling about a spike in no-shows. The culprit, they said: Online reservation services had created a market that encouraged people to make reservations they never intended to keep, but instead resell them for hundreds of dollars.

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That hurts everyone in the industry, Bores said. If reservation “pirates” can’t sell them, they cancel at the last minute or don’t show at all, leaving a restaurant stocked and staffed for a full house serving significantly fewer diners than expected, he said. It also hurts servers who earn less in tips.

And diners who might have come in to eat if they had been able to get the reservation days or weeks earlier find themselves at home or at a less-preferred restaurant, Bores added. Those include people least adept or able to afford the extra cost of paying for a reservation because they’re celebrating a birthday or anniversary

So Bores introduced legislation this week that, if it were to become law, would require third-party services to have written agreements with the restaurants for which they offer reservations. If they didn’t, state officials could fine them up to $1,000 per day for each restaurant. And diners or restaurants could sue the services to recover the cost of the reservation.

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Bores was clear about his goal.

“The idea is, once this passes, this market should not exist,” he said.

Frey, who launched Appointment Trader in July 2021, said the market exists for a reason and his company proves it. Reservations for more than 375,000 restaurants in some 350 metropolitan areas around the world have been sold on his site. That includes nearly 16,000 restaurants and bars in New York. In the past year, the site has done nearly $6 million in business.

Arya Toufanian, who launched Cita last year in April, said his website allows would-be diners without wealth, power or connections to score some of these sought-after time slots. Because it can be difficult to get some reservations, he said, people seek those with connections, say, a five-star hotel concierge.

“Our marketplace allows the common New Yorker to get these reservations,” Toufanian said.

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Frey described Bores and Fernandez’s legislation as misguided and said he would use Appointment Trader to urge his New York users to fight it. Newcomers can’t sign up for his site and immediately glut the market with dozens of restaurant reservations, he said. They have to sell at least half of their first 10 reservations to prove they can cater to the market.

That’s all his site is doing, Frey said: catering to a market that will exist whether it’s done above board like it is now or on a black market that crops up were Bores and Fernandez’s legislation to become law.

“The reason why Appointment Trader works is consumers have a problem getting a reservation,” he added. “They wouldn’t buy a reservation if they were easily able to get one.”

Toufanian made the same argument, adding that reputable sites such as Cita offer customers safeguards like return and refund policies, and customer service when things go wrong. Without those protections, bad actors will still use the lure of supplying customers’ demands to defraud them, he said.

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“We are fundamentally good actors with an understanding and empathy for restaurants and no-shows,” Toufanian said.

Eisler counts himself among those good actors. He came to Appointment Trader in October 2022 as a customer in New York for the weekend trying to get a reservation at 4 Charles Prime Rib. At first, he looked at Resy and found nothing. Then he stumbled across Appointment Trader, shelled out about $100 and went to the restaurant that night or the next in what he described as a “great experience.”

He decided to get in on the action. He puts in about an average of 10 hours a week but that can fluctuate based on the intensity of his schoolwork, a plus of the gig. He wakes up at 9 a.m. or 10 a.m. when reservations open up for most restaurants and uses a string of fake emails and phone numbers to try to book reservations. He uses fake accents to prevent restaurants from recognizing his voice and, in cases in which he’s booked under a woman’s name, has affected a falsetto. He also uses a bot to automatically book some reservations.

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“It’s a lot of persistence,” he said.

After taking a bit of a break to finish his spring semester, Eisler plans to get back to it. He finished his last final of his sophomore year Friday and planned to get back into the reservation game during summer break. He estimated that he would make between $10,000 and $40,000 depending on how much work he wants to put in.

Bores and Fernandez’s legislation won’t kill those plans. Their bills are still in committee and, if and when they are signed into law, they won’t take effect for 60 days.

“I guess I’m good for now,” he said.

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