Cities Regulate Delivery App Fees to Support Ailing Restaurants

High platform fees for food delivery apps have put struggling restaurants between a rock and a hard place.

1 minute read

January 3, 2021, 9:00 AM PST

By Diana Ionescu @aworkoffiction

Restaurant Tables

PIXNIO / Restaurant

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."

Tuesday, December 29, 2020 in City Monitor

Aerial view of snowy single-family homes in suburban Long Island, New York

New York Governor Advances Housing Plan Amid Stiff Suburban Opposition

Governor Kathy Hochul’s ambitious proposal to create more housing has once again run into a brick wall of opposition in New York’s enormous suburbs, especially on Long Island. This year, however, the wall may have some cracks.

March 20, 2023 - Mark H. McNulty

Empty parking garage at night with yellow lines marking spots and fluorescent lighting

Rethinking the Role of Parking in the American City

In cities big and small, the tide is turning against sprawling parking lots, car-centric development, and minimum parking mandates.

March 16, 2023 - The New York Times

A futuristic version of New York City, with plants growing neatly on top of modern skycrapers.

Friday Eye Candy: 20 AI-Generated Cityscapes

AI-generated images are creating new landscapes and cityscapes, capable of inspiring awe or fear.

March 17, 2023 - Chris Steins via Medium

View of street in Chinatown, San Francisco with cars parked along curb and red Chinese lanterns hanging above street

Study: Autonomous Cars Won’t Solve the Parking Problem

In hyper-dense cities where incentives to reduce car use and eliminate parking are already high, mass adoption of AVs won’t significantly reduce parking demand.

1 hour ago - Streetsblog USA

A group of wetsuit-clad swimmers gathers to talk in shallow water near the shore of the San Francisco Bay.

Proposed Pool Would Make an Olympic-Sized Play Area in the San Francisco Bay

The San Francisco Bay is usually an undesirable place to swim, except for a hearty few. A development proposal seeking assistance at the state level would add a pool to the Bay’s waters to make the idea of going for a swim more appealing.

March 24 - The Mercury News

Chicago elevated train over busy city street surrounded by high-rise buildings

Chicagoland Transit Agencies Call for State Funding as Budget Shortfall Looms

Illinois transit agencies want to see changes to a law requiring them to collect half of their revenue from transit fares, arguing that low ridership and staffing shortages will lead to a massive budget gap without intervention.

March 24 - Crain's Chicago Business

New Updates on PD&R Edge

HUD's Office of Policy Development and Research

HUD’s 2023 Innovative Housing Showcase

HUD's Office of Policy Development and Research

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.