Denver City Council approves a temporary cap on delivery fees to help struggling restaurants.
On Monday night, the Denver City Council passed an ordinance to cap delivery fees that restaurants pay to third-party delivery services like Uber Eats, Grubhub, and Door Dash. The unanimous vote caps delivery fees at 15 percent.
The ordinance from Councilwoman Kendra Black limits the commissions charged to local restaurants, which sometimes can reach 30 percent or higher. Additionally, it would bar the delivery companies from adding processing or service fees. On the other hand, it would allow additional marketing fees to be charged but only if restaurants opt to do so. Eateries would also have to give their permission to have their menus posted on the third-party sites.
The ordinance would also require that 100 percent of the tips go to the delivery driver. It is also stated the driver's pay cannot be reduced in an effort to make up for the commission cap.
The vote comes months after the Colorado Restaurant Association and EatDenver brought forward certain concerns. Due to the pandemic, the restaurant sector has been struggling, and more than 50 restaurants within the city have closed permanently.
While the ordinance aims to help struggling restaurants, Uber Eats believes it will negatively impact delivery drivers. The company said in a statement that “regulating the commissions that fund our marketplace forces us to radically alter the way we do business and ultimately hurt those that we’re trying to help the most: customers, small businesses and delivery people.”
The ordinance will be applied for the next four months.
What do you think? Are you for or against this temporary cap? Leave a comment below.