SF Board of Supervisors Considers Compromise With Delivery Giants on First-In-Nation Permanent Fee Cap

Next week the San Francisco Board of Supervisors could approve a new law allowing restaurants to pay higher delivery fees to apps like DoorDash and Grubhub in exchange for better visibility and more promotion. The legislation would essentially codify a loophole to the city’s first-of-its-kind permanent 15 percent cap on the fees restaurants pay to third-party delivery companies; it would allow restaurant owners to opt out of the cap, paying 25 or 30 percent delivery fees in exchange for benefits like their businesses coming up faster in searches, the San Francisco Chronicle reports.

The legislation comes after a contentious legal battle between DoorDash and Grubhub and the city, and it signals a ceasefire as the two companies have paused their litigation while the Board of Supervisors considers amending the original ordinance. If the Board chooses not to adopt the new regulation, the companies could proceed with their lawsuit.

The two companies claim San Francisco’s decision to cap the fees restaurants pay to have their food delivered by third-party apps is “unconstitutional and ‘driven by naked animosity and ill-conceived economic protectionism.’” While some, like Executive Director of the Golden Gate Restaurant Association Laurie Thomas, feel the amended legislation would be a net positive, others aren’t so sure. Samir Mogannam, whose restaurant Beit Rima offers delivery through DoorDash, fears restaurants may be exploited. “I would hope that the city would protect businesses as much as possible,” Mogannam told the Chronicle.

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