Emergency bill passes to give DC restaurants relief against higher delivery app fees

WASHINGTON (7News) — The D.C. Council this week has passed an emergency bill that offers restaurants relief against high delivery app fees. After being amended and adjusted, the legislation passed unanimously.

Third-party companies like GrubHub, DoorDash and Uber Eats offer restaurants delivery package plans that range from 15% to 30%.

In March, after the city’s 15% pandemic cap on commission fees expired, food delivery companies started raising charges for special services, including prioritizing search results for consumers.

“During the pandemic, the council created a 15% cap on fees but as the pandemic measures ended, we’ve seen third-party apps move to increase fees. And what we heard from many small businesses and restaurants is that without further protections, they would be forced to pay higher fees or see themselves reduced or removed from consumers just looking to buy a meal,” said Councilmember Charles Allen.

Some restaurants said they are now losing customers, being buried on the app even if they have fewer miles to deliver to, all because they have chosen to pay the lowest commission. The legislation introduced by Allen states that a delivery company cannot reduce the availability of delivery drivers to a restaurant based on the commissions paid.

“That plays out by suppressing restaurants who pay lesser fees in searches, shrinking the delivery radius around restaurants and more. They know they’ve got the upper hand, small restaurants have few choices and the third-party app, not the driver bringing that meal to your doorstep or the staff cooking in the kitchen are the ones making record revenues while everyone else is struggling,” said Allen.

DoorDash last year made $6.6 billion, a 35% increase from the previous year. The company said the new measure undermines the relationships with merchants and argues that all D.C. restaurants are treated equally.

Many small restaurants in D.C. said that they are being unfairly singled out by delivery companies because they are choosing to pay the lowest delivery plan. The bill prevents companies from reducing the delivery area for a restaurant below four miles, which is paying the lowest commission, which is 15%.

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