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Thursday, December 10, 2020

Cleveland City Council Approves 15% Cap on Third-Party Delivery Commissions for Cleveland Restaurants

Posted By on Thu, Dec 10, 2020 at 11:57 AM

click to enlarge UBEREATS
  • Ubereats

Update: In a better late than never move, Cleveland City Council this week voted to approve a 15% commission cap on fees third-party delivery services like UberEats can charge Cleveland restaurants.

Mayor Jackson is expected to sign the legislation soon, which will not only cap the commission fees but also prohibit the services from reducing compensation for delivery drives.



The caps will last until 90 days after dine-in service returns to normal.

Restaurants routinely pay upwards of 30 percent of the purchase price to third party services like Grubhub, Uber Eats and DoorDash, which is why diners are encouraged to contact the restaurant directly to see if they offer their own delivery. Those fees have always been onerous, but they are exceptionally so now that restaurants can't offset them with robust in-house dining and booze business.

Cities such as New York and Cincinnati established caps back in May.

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(Original story 12/2/2020): If Council President Kevin Kelley has his way, third-party food delivery services will have the commission fees they charge restaurants capped at 15-percent of the purchase price on delivery or pick-up orders. The legislation that Kelley introduced today would remain in effect until restaurants can fully reopen dining rooms.

It would also prohibit any reduction in compensation for delivery drivers as a result of these lower commission amounts.

If passed, Cleveland would join cities across the country — albeit belatedly, as usual — in limiting such fees. New York City voted back in May to cap those commissions at 15 percent, as did Cincinnati.

Restaurants routinely pay upwards of 30 percent of the purchase price to third party services like Grubhub, Uber Eats and DoorDash, which is why diners are encouraged to contact the restaurant directly to see if they offer their own delivery. Those fees have always been onerous, but they are exceptionally so now that restaurants can't offset them with robust in-house dining and booze business.

Of course, the delivery providers aren't taking this lying down, arguing that the limited fees will only get passed down to the customer in the form of steeper delivery rates. That will lead, they add, to less business for the restaurants that are so eager to sell more food.

We will keep you updated on the status of the proposed legislation.

And, as always, call restaurants directly to see if they offer their own delivery or pickup the food yourself when at all possible.

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