Lafayette Approves 15 Percent Fee Cap On Food Delivery Businesses

A temporary 15 percent cap on fees charged by third-party, app-based food delivery businesses like DoorDash, Uber Eats and GrubHub was unanimously approved this week by the Lafayette City Council, whose members said local restaurants need that support during the COVID-19 pandemic.

The cap, which expires when the county COVID-19 health emergency is declared over, takes effect Nov. 16.

In addition to a 15 percent cap on delivery fees, the ordinance imposes a 10 percent vendor fee cap on pickup orders.

Third-party delivery providers have been charging restaurants between 10 and 30 percent of the purchase price per order during the pandemic.

During the pandemic, restaurants in Lafayette and elsewhere have survived on takeout orders and outdoor dining, and to a lesser extent, indoor dining as COVID-19-related restrictions have eased.

But as the weather grows colder and potentially more rainy, outdoor eating will assume a smaller role in the restaurant business. Combined with an expected drop in indoor dining capacity, with Contra Costa and other
Bay Area counties moving into more restrictive rules as COVID-19 cases and hospitalizations rise, local restaurant operators say takeout and delivery orders will continue to be their lifeblood.

“These add-on fees could have a significant impact on the restaurant’s profitability and viability,” a city report says.

Lafayette City Council members Cam Burks and Steven Bliss noted that a delivery fee cap is a form of government interference in the free market. But both said the urgency ordinance was otherwise reasonable, as well.

Neighboring Walnut Creek passed a similar 15 percent cap on Oct. 6; other cities that have taken similar measures include Berkeley, San Francisco, South San Francisco, San Leandro and Fremont.