Cities Regulate Delivery App Fees to Support Ailing Restaurants

With many restaurants across the country closing their dining rooms under stay-at-home orders to contain the spread of COVID-19, delivery has been one remaining lifeline for struggling food businesses. But with apps like DoorDash charging huge service fees, restaurants struggle to make a profit in an industry that already operates on razor-thin margins. Some cities have started putting a cap on delivery app fees, which usually start at around 30%. Local ordinances passed in Cleveland, Chicago, Los Angeles, and a handful of other cities have limited the fees to 15-20%. Prior to New York City Council reining in delivery apps in May, restaurants could even be charged for phone calls that didn't result in an order.

The delivery fees are just one part of a disruptive new industry that cities are still trying to regulate. New York City Council Member Mark Gjonaj, who advocates for a permanent fee cap, also wants to see greater transparency and improved worker protections for delivery drivers. The patchwork of emergency regulations passed this year reveal the "tension between the delivery apps and the restaurants that benefit from their services," Camille Squires points out. "The fight to regulate Big Tech delivery apps will continue well beyond the pandemic."