L.A. Council Votes to Limit Food Delivery Company Charges to Restaurants


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Fees charged by third-party delivery services will not be allowed to exceed more than 15% of the cost of the order in Los Angeles the L.A. City Council took action Wednesday.

The limit on fees will remain in place for at least 90 days after the city lifts health restrictions on in-room dining amid the coronavirus pandemic.

“During the pandemic, it is estimated that up to 90% of restaurant sales are attributed to delivery orders,'' said Councilman Mitch O'Farrell, who authored the motion. “Why should our local mom-and-pop restaurants, as well as their customers, be put in a position to subsidize delivery app companies? This is about local interests over Wall Street interests. Only a level playing field will help our small businesses survive.''

Third-party delivery companies such as Doordash, Uber Eats and others, will also no longer be allowed to charge restaurants more than 5% to use their services, or to pay commissions thanks to action taken by the city council on Wednesday.

The city council directed the Los Angeles Chief Legislative Analyst and the Economic and Workforce Development Department to report on the effectiveness of the ordinance no later than 30 days after the prohibition of on-premise dining has been lifted.

The ordinance must be signed by Mayor Eric Garcetti to take effect, but he is expected to do so soon.

On Friday, Garcetti said restaurants in the Los Angeles area will be allowed to reopen at 60% of capacity as health restrictions imposed amid the coronavirus pandemic are eased.

Details on the outdoor dining program are still being finalized by city officials.

Photo: Getty Images


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