SMC Supervisors Adopt Ordinance Limiting Delivery Fees Charged to Restaurants by Third Party Delivery Services

South San Francisco, CA  November 17, 2020 Submitted by David Burruto, Chief of Staff, SMC Supervisor Pine

Supervisors Dave Pine and Carole Groom Sponsor Ordinance to Support

Local Restaurants

REDWOOD CITY – Today, the San Mateo County Board of Supervisors approved an emergency regulation to establish a temporary cap on commissions and fees charged by third-party food delivery services (e.g., Uber Eats, Grubhub, and DoorDash) to local restaurants in all of San Mateo County through the earlier of June 30, 2021 or the end of the local emergency declaration related to COVID-19.

“Limitations on indoor dining have forced many restaurants to rely heavily on takeout and delivery business, but the excessive fees charged by third party delivery services have made it difficult for many restaurants to stay afloat,” said Supervisor Dave Pine, who is cosponsoring the regulation.

Absent a cap on delivery fees, third-party delivery service companies regularly charge restaurants burdensome fees to use their services. For example, Uber Eats imposes a fee in the amount of 30 percent of the cost of an order for delivery using Uber drivers, and charges 15 percent of the cost of an order if a customer orders through the Uber Eats platform and picks up the order directly from the restaurant.

“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 is also cosponsoring the regulation.

Key provision of the emergency regulation include: (i) capping fees charged by third-party food delivery services at no more than 15 percent of the order amount for any delivery; (ii) limiting pick up fees to 10 percent of the order amount of any order placed by customers through the service; (iii) prohibiting delivery services from reducing driver pay as a result of the regulation; and (iv) requiring delivery services to provide customers with an itemized breakdown of all charges and fees.

Numerous Bay Area jurisdictions have adopted similar fee caps, including South San Francisco, Millbrae, San Francisco, Berkeley, Fremont, San Leandro, Walnut Creek and Marin County, as well as cities around the country, such as Seattle, Los Angeles, and New York City.