This Bay Area county may be next to impose a food delivery cap

Bay Area

SAN JOSE, Calif. (KRON) — Santa Clara Board of Supervisors are on the verge of approving a 15% cap on third-party food delivery fees in an effort to help local restaurants as they brace for weeks under lockdown. 

At Tuesday’s board meeting, supervisors unanimously voted to draft up a countywide ordinance relating to a temporary cap on commissions and fees charged by third-party delivery services by the next meeting on Dec. 15 instead of its original plan to report by January. 

“Supervisor Simitian and I received a lot of input saying great, but do it fast, like our businesses hanging on by the skin of their teeth,” said Cindy Chavez, President of the Santa Clara Board of Supervisors. 

“The most important thing that we have learned is that, one of the hardest hit businesses during COVID-19 has really been restaurants and we want those restaurants to stay open and healthy,” Chavez added. 

“This was an attempt to make sure that we were protective of the businesses, protective of those employees of those businesses, the drivers who do this work and also the public.”

Since the start of the pandemic in March, restaurants relied heavily on third-party delivery services like DoorDash, UberEats and others to stay in businesses but say they were quickly hit with increasing fees. 

With indoor and outdoor dining no longer allowed due to the new regional lockdown order as COVID-19 cases continue to rise — supporters of the cap say restaurants are entering a time of “winterization” and have used up their last dollars on outdoor dining infrastructure they no longer can use. 

“Some of the businesses told us that in some instances up to 50% of the price of the meal go to delivery and the challenge with that is we go into even more restrictions, is that for many of these companies it did not make sense for them to keep paying those type of rates because it left no rate of return for themselves or for their businesses,” Chavez said. 

“I don’t begrudge people making a rate of return or a profit,” Chavez added. 

“I do mind gauging and what this started to me was like gauging and that’s why I think it’s so important that the county step in.”

According to DoorDash’s website — restaurants pay the company a recurring monthly fee for software to accept online orders, a flat fee per order, or a percentage of the order total. 

KRON4 News reached out to DoorDash for a comment on the potential countywide cap and according to a company spokeswoman, pricing regulations could cause the company to increase costs for customers but do remain committed to finding solutions that benefit everyone. 

DoorDash released the following statement to KRON4:

“DoorDash has always supported restaurants. Pricing regulations could cause us to increase costs for customers, which could lead to fewer orders for local restaurants and fewer earning opportunities for Dashers. Pricing regulations can also remove options available to restaurants by limiting their ability to opt-in to additional services to help their business. We remain focused on solutions that better support restaurants, customers, and Dashers.”

But supervisors argue companies tack on additional fees with little to no information as to what it is used for. 

Supervisor Joe Simitian tells KRON4 News he was once a food delivery driver himself and understands the job can be dangerous with added pressure to make delivery’s on time — even more so now with COVID-19. 

Simitian says the county will also be focused on making sure drivers don’t have their tips or wages withheld to ensure all parties involved can get through these difficult times. 

“It’s one thing for there to be a delivery fee but if there is also a pickup fee for folks who use the platform, plus a marketing fee, plus a listing fee and you start to stack those one on top of the other … all of a sudden what you thought was a simple and modest cost can get really out of hand,” said Simitian. 

“One of the things we’ve asked our legal counsel to look at specifically is making sure that folks don’t have their wages or their tips in any way withheld or garnished,” Simitian added. 

“We want to make sure that everybody gets treated fairly, understand that folks out there that are providing service need to be able to make a buck doing it, but within limits and with some fairness to all other parties involved.”

If the board adopts the capm the county will focus to align its plan with other local cities who have passed similar measures including the city of Santa Clara.

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