Before this week, if you were to place a $100 order from your favorite local restaurant and had it delivered through a delivery app, up to $30 of it would never go to the restaurant, but would be kept as a commission fee by the delivery app company.
Effective Nov. 17, that amount was capped at $15, based on a unanimous decision by the San Mateo County Board of Supervisors voted unanimously to implement a temporary emergency ordinance that restricts the fees that third party operators that coordinate food deliveries – like UberEats, DoorDash or Grubhub – can collect from restaurants.
Such delivery coordination companies regularly charge restaurants upwards of 30% per order, according to Lauren Carroll, a County Counsel fellow.
Under the county's cap, delivery services fees are limited to no more than 15% of an order for delivery orders and 10% for pickup orders. The ordinance applies to all restaurants in San Mateo County, as well as to customers who order at county restaurants from outside of the county. The delivery-coordination companies are also prohibited from reducing the pay provided to delivery drivers as a result of the regulation. In addition, they are required to provide an itemized breakdown of all charges and fees to customers.
The ordinance is set to expire June 30, 2021 or whenever the supervisors declare the COVID-19 emergency to be over. If the regulation isn't followed, restaurants may bring lawsuits against the delivery companies and recover attorney fees, Carroll explained.
"Keeping restaurants in business is important for the local economy, and reasonably priced restaurant delivery options ensure that people who are homebound during this pandemic can get fresh meals brought to their doors," said Supervisor Carole Groom, who cosponsored the regulation, in a press statement.
Restaurants, now more than ever, are reliant on takeout and delivery orders to stay afloat, staff noted. As winter approaches, outdoor seating is likely to be less appealing, and as the pandemic surges, indoor seating is likely to be unappealing to customers, severely limited, or not permitted at all.
"We feel like this emergency ordinance is at least a small way to level the playing field for these restaurants," said Don Cecil of SAMCEDA, the San Mateo County Economic Development Agency. "Many will not make it, but this is one way to help those that will to survive the winter."
San Mateo County joins a number of other jurisdictions throughout the region and U.S. in pursuing such caps, including San Francisco, Los Angeles, New York, Seattle and Washington D.C., as well as Alameda County, Marin County, Berkeley, Oakland, Santa Clara, Fremont, South San Francisco and Millbrae, according to county staff. In larger cities where such ordinances have already been passed, for instance, in Portland and Los Angeles, there have been reports of some restaurants alleging that the companies have been slow to respond to the legislation and adjust their fees.
While Millbrae's ordinance exempted chain restaurants from the ordinance, San Mateo County ordinance takes precedence over the city's, so Millbrae's exemption for chain restaurants will end, county Counsel John Beiers noted.