The Walnut Creek City Council will consider a cap on fees that local restaurants pay for online ordering and delivery service.
Recently, some local restaurants and the business advocacy groups Walnut Creek Downtown Business Association came to the city requesting a temporary cap of 15 percent charged by third-party services including
DoorDash, Grubhub and Uber Eats. These delivery service companies, a city report says, have been charging between 10 and 30 percent per order when customers order food through the delivery service’s app or restaurant website.
Before the COVID-19 pandemic these fees didn’t necessarily have a substantial impact on local restaurants, with indoor dining suspended since March, restaurants in Walnut Creek are now reliant on delivery/take-out orders for upwards of 70 percent of their business operations. The fees on these orders, the city report says, present a significant impact on restaurants’ profitability.
Other Bay Area cities, including Berkeley, San Francisco, South San Francisco, San Leandro and Fremont, have taken similar actions, the city report says.
If the council chooses to adopt a proposed urgency ordinance enacting a temporary cap on food delivery commissions and fees, it would require a four-fifths council vote.
Tonight’s meeting begins at 6 p.m. on Zoom.
38 comments
Can these control freaks ever just let the free market determine anything? For God sakes if COVID hoax has shown us anything it’s that power freaks think they know better then the people. If I buy a 12.00 plate of food but get charged 20.00, that’s the cost. If I don’t want to pay that I won’t use their service. It’s that simple. I’m so sick of as lol these tiny tyrant city council members trying to control every aspect of life. That’s not your job to touch everything and use the power of government as your hammer. Go fix the roads or plan community events or Christmas decorations for downtown. Do you jobs or step down. Controlling business is best left to Sacramento, they are really good at that.
completely agree and took with words out of my mouth!!
Great points!!
Agreed. The cost of delivery is ridiculous, taking a slice from from the restaurant profit and costing us more money. We now call direct and pick it up ourselves. Do the comparison between the delivery price and the direct price to see if it’s worth it for you. Market forces should prevail.
@Sam I don’t think you have the issue framed correctly. The fees that the restaurants are paying are already included in the food price. These cover costs of running the system, marketing, profit, etc. Then on top of that they charge the buyer a delivery fee and then a tip to the driver. So even if you order for pickup using like DoorDash or Yelp the restaurant is charged a fee.
We have already seen restaurants raising their menu prices or having a different price on DoorDash than instore ordering to try and increase revenue.
Where should the money flow – to restaurant or to delivery services?
@BernieM, many restaurants contracts with the delivery companies require the restaurants to pay commission on phone orders as well, so you may be saving yourself money and costing the business more.
I don’t think you understand what I’m saying. Let the free market decide. Restaurants don’t have to sign on with door dash. It’s only the most recent hype in advertising. There is no mandate to list your business there and people can pick up there own food. Further, if restaurants raise their prices to high, people will not go at which point they will have a another business decision to make.
@wipe
This is why quality small non chain restaurants have no business using these apps. It’s a strong arm tactic. Just like the mask mandate. Who wants to eat nasty cold, soggy food anyway? I ordered 1 time, that was all it took to delete the app. The driver had to have eaten half my fries too.
TO THE RESTAURANT OWNERS: STOP WAISTING YOUR MONEY. MAKE QUALITY FOOD, WE WILL COME. SUE THE STATE AND THE HEALTH DEPARTMENT. THIS IS THE ONLY WAY
Far more people use apps than call. I never call in orders since they usually get them wrong, when I use the app I have an electronic trail to prove order is wrong. I rarely have problems with my orders and use apps about 3 to 5 times a week. I have never had a driver eat my food either.
Government needs to stay out of the private sector. Let the markets work-If food delivery fees are too high, people will not pay them, and they will have to come down. YES on 22
Those fees should be charged to the consumer, not the restaurant. The person who wants delivery should pay for the cost of the delivery including fees. Restaurants should make the same cost as they would if someone sat in their restaurant…not 10-30% less. I refuse to use food delivery services. I order direct and pick it up because I don’t want to screw over small family owned restaurants.
The cap should be determined by market forces. Why does the city need to get involved?
Power.
Pure and simply, it’s all about power. :Politicians sticking their collective noses into businesses…just like CA requiring company boards of directors to have a minimum makeup based on race and other (non-business-related) “qualifications.”
Very few politicians know anything about running a business – and certainly, none in California know anything about that or finance.
How about instead of complaining about fees
Instead push for opening at reduced capacity
As well as the city perking you up with a stipend for opening up
Complying with all Covid city and state and council demands will net you a 5000 bonus per month
They can inspect you and even gather feed back from customers to encourage other businesses to open in same manor
The city and state people are all making money
Owners should demand some sort of opening since these people have been making money This whole time
If you don’t say something they will take advantage of you
Take away your right to live and your Pursuit of happiness
The state and cities do not care about you they are in Political mode
And crying about republicans and pushing bills to harm your children
Your compliance is their gain
It’s sad to see in America where the people are being pushed down by politicians to further their income at your expense
Are we being ruled or is this America
What happened to free enterprise? By their logic, the fees the dentist charged me should be capped, (no pun intended) because it has a significant impact on my bank account.
Go pick up your own food. Why go through a third party?
I agree, any convenience fee should be paid by the customer, not the eatery. Rusiness should not have to eat that. I’ve never had food delivered, just curious, are delivery drivers tipped? Do delivery services have apparatus to keep food at serving temperature? I expect hot food to be hot and cold food to be cold. Fried foods become inedible beyond 5 minutes out of the fryer.
This should all be handled with the free market system, it doesn’t need government intervention. If all the restaurants in WC would refuse to use the food delivery companies at fees higher than 15%, then the delivery companies would have to lower their fees in order to still get business.
The free market system is not working for many business as the delivery fees and promotion fees really add up and cut into bottom line. These fees apply at times even when the restaurants receive a phone orders.
there is a misunderstanding here– the fees are charged to the
restaurant, not the customer, resulting eventually in higher cost for the
business
Yep! A lot of them are barely making money after paying a high fee. I think this is actually a good thing.
Can governments look into considering caps on how much they tax and spend?
Governments should not be interfering with private contracts. If WC area restaurants feel they can handle delivery better on their own they are free to hire anyone. There was an article in SGFate a couple of weeks ago where restaurants in a particular neighborhood of SF have done exactly that.
If the delivery company sale is not profitable, stop taking them or charge a higher delivery price. I personally have been picking up my take out orders. With three companies in the market place it seems like restaurant should be making them compete for business.
Agreed. And if so much of your business comes from deliveries then it should be possible to hire an in-house driver for it.
Bad, bad (very bad) move Walnut Creek Downtown Business Association. You can raise costs to cover your expenses, apply pressure on politicians to reopen, or establish your own delivery services…whining like little girls to politicians to cap independent businesses fees? You will & should lose every customer you have.
Just to review your recommendations:
1. You can raise costs to cover your expenses
I am certain you see that this is going to reduce the number of sales they can make. When a $12 meal already costs the customer $19 after the additional fees we pay plus tax plus tip, an increase of up to 30% is pretty prohibitive. The customer would ne paying nearly double the cost of the meal at that point.
2. Apply pressure on politicians to reopen
I’m not sure just how much political clout you think downtown Walnut Creek restaurants have but it seems reasonable that is an easier lift to go after the fees than to change state policies on re-opening.
3. Establish your own delivery services
Not a reasonable solution. This would require web development to create, then they need to find drivers who want to work on a decreased number of calls and a marketing campaign to drive users away from the general apps they already use to something very specific.
So no, none of these solutions are going to be likely to make a substantial change for these small businesses and they are looking to local politics for a solution. 15% doesn’t seem too low a cap on these fees..
So imagine this – that $12 meal already has a fee from the business of $3.00 so they net $9.00. This covers the cost of marketing, overhead and profit for the delivery company. Then the consumer pays delivery fee of $3.00 plus tax of $1.30 plus tip of $3.00 to driver. Total meal is $19.30 which if consumer is ok with then fine. But restaurant still made only $9.00. In non Covid they made 90% on direct sales of $12 and 10% delivery of $9 for total of $11.70. How to survive if service fee doubles?
Can City Council do something worthwhile? The City is falling apart and they are worried about this? Bunch of stodgy old lazy good for nothings.
The reason they are getting involved in this has little to do with fees. They will add some sort of racial equality metric and strong arm the companies into compliance. Just like the state has done with the management boards of California corporations.
Does anyone remember the book “The Peter Principal”?
This sort of autocratic politics takes the concept to a new level, where incompetence will rise through the ranks that much faster.
A lack of reading comprehension for everyone.
“The Walnut Creek City Council will consider a cap on
>>> fees that local restaurants pay for online ordering and delivery service.<<
Yes! Some businesses are barely making it as it is, but when food delivery services gouge the owners….well, that’s just another nail in the coffin in local business. Grubhub, DoorDash, etc make enough with their service charges without sticking it to the business as well.
Here’s an idea, Why don’t restaurant’s hire a delivery driver and offer delivery themselves. 5-10 mile radius charge a small fee. Adding to the workforce, add a personal touch, keep it in house and the driver gets a tip instead of a tech company maybe giving it to them. What is the laid off wait staff doing for work right now? Driving door dash?? Lol. Give me a break. Other then that you are subject to a tech company profit needs. Has anyone even asked what these tech companies do with your data? They make money on all fronts so don’t act surprised when your medical insurance carrier won’t cover your bypass because Door Dash reported you as eating 4 double cheeseburgers a week and Netflix told them you binge watch reruns of 80s sitcoms while only taking 23 steps a day reported by Apple and not wearing your mask to bed. I could fix everything but nobody asks me and I only post here so nobody can try.
@ Sam-
All good, valid points (except to Chuq)..
Now would you be so kind as to fix everything?
I’ll never understand people who use food delivery services such as doordash or ubereats. A meal that costs $12 suddenly totals $18 and is delivered by people who are not required to meet any health or sanitation standards.
Yes in theory its a great idea and many great people deliver for these companies but in reality delivery people have gone into your food and are not handling your food in a sanitary manner. Also food is ALWAYS soggy and been sitting for 30-45 minutes before it gets to you.
Just pick up your own food and save the extra fees
I used Instacart for a Costco order once. When I saw the markup of the Costco prices to Instacart, have never used it since.
The restaurants that are unhappy with the charges by the delivery services should change to a less expensive service or start doing their own delivery. No need for the WC city to get involved.
Since these restaurants are closed or open with limited restrictions by the state counties and cities why don’t the state counties and cities reduce taxes or fees that the businesses have to pay them by 30%. Running a Restaurant at 50% capacity will never make a profit. So if the city really cares about these businesses give them a break but leave food prices delivery prices in the hands of the restaurants. To me that is not a city function
They don’t care. I think it’s time to reimagine city leadership. We definitely need a switch to a strong mayor format for all our cities. Someone needs to be responsible for the direction and vision. They have this card trick layered bureaucracy shell game always dodging accountability. I want a mayor that we can fire if he or she is not working for the people and taking our city in all kinds of stupid directions. We need a few good men and women to rise to the top for our communities.
If you don’t want to pay an extra 5 dollars for your pizza, get your a** in the car and drive yourself to pick it up.
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