Supervisors Push for Cap on Food Delivery Service Fees

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December 7, 2020

SUPERVISORS PUSH FOR CAP ON FOOD DELIVERY SERVICE FEES

SAN JOSE At the upcoming Board meeting tomorrow (Tuesday, December 8), Santa Clara County Supervisors Joe Simitian and Cindy Chavez are proposing the County adopt an ordinance to put a temporary cap on commissions and fees charged by third-party food delivery services to local restaurants and/or their customers (see attachment).

“The goal is to protect local restaurants and consumers from price gouging during a pandemic,” said Simitian. “Many of these restaurants don’t have the infrastructure to host their own platforms for takeout and delivery, so they are often forced to accept excessive fees and commissions. They simply have no other option.”

Simitian also noted that, “COVID-19 already imposes extraordinary financial hardship on local restaurants, particularly now that both indoor and outdoor dining becomes limited/prohibited due to inclement weather and/or health and safety requirements.” Many of these businesses rely on third-party delivery vendors such as DoorDash, Uber Eats and Grubhub to meet their business’s delivery needs. “While delivery vendors provide an important service, and are certainly within their rights to charge for such services, the current pandemic unfortunately creates opportunity for price gouging. That’s the problem we’re tackling.”

Third-party delivery service commission and fee structures vary by company, but food establishments are often charged upwards of 30% of the purchase price for delivery and as much as a 15% commission for customer pick up ordered through the third-party online platform. The third-party delivery services are also charging fees to the consumer, sometimes with little transparency as to what the fees cover.

“At a time when local businesses are struggling to stay alive, when restaurant workers are at risk of losing their livelihoods, and the general public is struggling financially, we need to make sure that everyone is treated fairly," said Simitian.

The proposal from Simitian and Chavez (attached) also proposes protections for delivery drivers, including assurances that tips to delivery drivers are not withheld, and actually go to the drivers as customers intend them to be.

“The biggest share of COVID-related unemployment has come in our local restaurant industry. Just as we have done with our moratorium against commercial evictions, we must do what we can to help these restaurants survive,” said Cindy Chavez, president of the Santa Clara County Board of Supervisors.

(Attachment)

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Press Releases

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Local Business and Finance

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