As restaurants struggle to stay afloat during the coronavirus pandemic, some communities are working to cap fees that food delivery services — like GrubHub, DoorDash and UberEats — can charge.
These services generally charge restaurants between 25 and 30 percent, and in an economy where eateries can only offer takeout and patrons are often opting for food delivery over leaving their homes, restaurant owners say this cut is too much of a squeeze for their already struggling businesses. San Francisco Mayor London Breed has already capped the fees to 10 percent for the duration of the COVID-19 crisis, and some towns and cities in Massachusetts would like to follow suit.
Cambridge City Councilor Patty Nolan is spearheading a local effort to limit the fees to 10 percent in Cambridge. She submitted a policy order this week which will be taken up at the city council meeting on Monday.
Boston City Councilor Ed Flynn and Newton City Council President Susan Albright also plan to bring the issue of capping third-party delivery service fees before their respective councils next week.
"I'm really concerned that we're going to lose the diversity of restaurants we have in Newton if they can't afford to cover their costs during this terrible period," said Albright.
Nolan said she decided to act after hearing from constituents who own restaurants in the city.
"I think it's stunning. We are all eager to help our local, loved restaurants, right? We're encouraging people to support them, and people are flocking to delivery apps because they don't want to leave home," she said. "But what we don't realize is that the exorbitant fees that are being charged by these delivery services are taking a bite out of really, really small profit margins to begin with."
John Schall, owner of El Jefe's Taqueria in Cambridge, agreed, adding that though he always thought the delivery services' fees were unfair, the pandemic has shifted the balance even further in favor of the food delivery companies. His sales dropped by 60 percent last month, he said, and the percentage of his income that went to delivery companies more than doubled.
"Delivery sales are now 75 percent of my business," he said. "The amount of money I paid delivery companies went from $9,000 in the first half of the month to $12,000 in the second half."
A spokesperson for DoorDash told WGBH News that effective April 13, the company cut commissions by 50 percent for independent restaurant owners who own five or fewer restaurants. The spokesperson said the 50 percent fee reduction also applies to Caviar — the food delivery company it purchased last year — and affects 150,000 restaurants in the US, Canada and Australia. It will remain in effect through May and may be extended.
UberEats and GrubHub did not respond to requests for comment.
