Third party food delivery services like DoorDash and Uber Eats have grown in popularity during the pandemic among people who are doing exactly what shelter-in-place requires of them: staying at home to prevent the spread of Covid-19. The services are, however, vastly unpopular with restaurant owners.
As restaurants hang on for dear life while losing money doing take out and delivery only, owners have seen third party services take a big bite out of what customers pay, sometimes as high as 30 percent of the bill. Cities and counties across the country and California—most recently Santa Clara County and the city of San Jose—have recently passed caps on those fees.
Pacific Grove joined the list of cities yesterday, Jan. 20, with a 7-0 City Council vote for an urgency ordinance capping delivery fees at 15 percent. It took effect immediately.
The Pacific Grove Chamber of Commerce requested the urgency ordinance, which will last as long as restaurants are operating at less than full capacity due to the pandemic, plus 60 days.
"What we are asking is to level the playing field and help restaurants survive the pandemic," said Moe Ammar, PG Chamber president. He said he asked restaurant owners to call into the meeting but, "frankly they're afraid of retaliation by some of the delivery companies."
A representative for DoorDash told the council that restaurants are six times more likely to stay open while using the platform compared to those who are not using it. He said they are offering the service for free through March 31 to small restaurants of five locations or less.
Residents who spoke were largely in favor of a cap, although there were concerns it could either cause delivery services to avoid P.G., cutting off a valuable service to senior citizens and others who depend on the service and bringing further harm to struggling restaurants.
Earlier the same day, the city of Monterey hosted an informational meeting for businesses about a potential cap in that city. Assistant City Manager Nat Rojanasathira told reporters today that about a dozen people attended to hear what a potential cap could mean and share their views on it. He said staff members are determining next steps.
Santa Cruz has had a similar urgency ordinance in place since April, 16, 2020. Some companies in turn are charging customers a fee to make up for the cap on what restaurants pay.
High percentages charged against restaurants isn't the only issue owners have had to contend with. Last year some restaurants found themselves on the DoorDash platform when they never agreed to it.