By the Daily Post staff
The Santa Clara County Board of Supervisors has voted 5-0 to cap fees restaurants are charged by delivery apps such as DoorDash, Grubhub and Uber Eats at 15%.
Some restaurants, struggling to survive amid government-ordered Covid shutdowns, have been hit with fees from thesre companies exceeding 30%.
The cap, approved Tuesday, applies to all 15 cities in Santa Clara County including Palo Alto.
San Mateo County approved a similar cap in November.
At the time, GrubHub called the caps “well-intentioned but counterproductive” because they lower the pay for drivers, which reduces the supply of drivers and decreases the number of orders that can be delivered.
DoorDash spokeswoman Campbell Matthews told the Post that her company supports restaurants, which is why the company offers a range of services, such as Storefront, which helps restaurants set up a website with online ordering with $0 commission.
However, the fee caps could lead DoorDash to increase costs for customers, which would reduce orders, causing both deliverers and restaurants to lose out on income, Matthews said.
The ordinance establishing the caps in Santa Clara County was approved a week after it was proposed — lightning-fast speed for the county government bureaucracy. The 15% cap came in the form of an “urgency” ordinance, which means it didn’t need to be heard twice by the board at two separate meetings, and could be approved with a supermajority vote. It goes into effect on Saturday.
The ordinance was proposed by Supervisors Cindy Chavez of San Jose and Joe Simitian of Palo Alto.
“Covid-19 already imposes extraordinary financial hardship on local restaurants, particularly now that both indoor and outdoor dining becomes limited/prohibited due to inclement weather and/or health and safety requirements,” Simitian said in a statement.
“Many of these businesses rely on third-party delivery vendors such as DoorDash, Uber Eats and Grubhub to meet their business’s delivery needs,” said Simitian. “While delivery vendors provide an important service, and are certainly within their rights to charge for such services, the current pandemic unfortunately creates opportunity for price gouging. That’s the problem we’re tackling.”
“At a time when local businesses are struggling to stay alive, when restaurant workers are at risk of losing their livelihoods, and the general public is struggling financially, we need to make sure that everyone is treated fairly,” said Simitian.