Santa Cruz Places Limit on Fee Charges by Third-Party Food Delivery Companies

KSBW ^ | 4/13

[nickcarraway]

Santa Cruz city officials are placing a limit on commissions charged by third-party food delivery companies.

City Manager Martin Bernal signed an executive order Monday establishing a temporary limit of 15% on fees. The order will take effect on April 16.

Officials said due to the shelter-in-place order, many people are using third-party applications and websites to place food orders.

"Our restaurants who have been able to adapt to a takeout and delivery model have done so at a high cost," said Bonnie Lipscomb, who is the city's director of economic development. "This order should help relieve some of the financial burden they have been carrying in order to keep their business open during the pandemic."

Zach Davis, who is the co-founder of the Glass Jar and runs three small businesses in Santa Cruz, said this order can help keep small restaurants in business.

"At a time of heightened health concerns because of COVID-19 and shelter in place order, the small restaurant owners and their employees are working to provide local sourced food with delivery services," Davis said. "But the fees of those third-party deliveries takes away the entire cost of the food delivered. The city’s emergency order will effectively keep our small restaurants in business.”

You can read the full order here.

[2banana]

Why not just order the food be delivered for free?

[SunkenCiv]

• Scammers Set Up Fake Food Ordering Webpage for Valley West Restaurant, Collect Credit Card Information From Unsuspecting Customers, Police Say

[wally_bert]

All in good time.

[AndrewB]

Works great until Atlas shrugs.

[Extremely Extreme Extremist]

I ALWAYS get carryout. I don’t trust delivery people.

[nickcarraway]

This isn’t limiting how much the delivery service can charge the restaurant, it limits how much the delivery service can squeeze the restaurant. I think these delivery services give the restaurant less that the customer price for the entree. For example, they might give the restaurant $15 for an entree that’s $20 in the menu.

[sasquatch]

The new price of Reardon Metal is??
Consider that Ayn Rand wrote that in the 50’s.

[DesertRhino]

Delivery costs more right now because it isnt as easy, and carries more risk. And many drivers are staying home. The correct response is that no delivery service there operates until this is changed.

[AndyJackson]

Apparently 10-15% is the usual commission paid to 3rd party deliverers, but it sounds as though they are using monopoly bargaining power to charge much higher fees to restaurants that don't normally service take out delveries.

The alternative is just to let the restaurant go out of business.

This is not a "free market" situation, but one created by the emergency and invocation of emergency powers.

[Jewbacca]

Or require food be free!

Everything is free!

What will happen now, for those that haven’t learned, is food delivery services won’t go to bad neighborhoods — or remote places — and will be declared racist.

[gogeo]

"But the fees of those third-party deliveries takes away the entire cost of the food delivered. The city’s emergency order will effectively keep our small restaurants in business.”

When they can't get anyone to volunteer to deliver?