Santa Clara County and San Jose have both imposed limits on how much food-delivery apps can charge mom-and-pop restaurants struggling to survive the pandemic.
The county’s ordinance tops the fees at 15 percent of the cost of an order and will last as long as the ban on full-capacity indoor dining remains in effect. San Jose’s fee restriction will expire in June, at which point the City Council may decide to extend it.
San Jose Mayor Sam Liccardo applauded his council colleagues for unanimously supporting the fee limit.
“I’m grateful that we could reach a compromise with food delivery companies … like DoorDash, as they provide a lifeline to our local small businesses,” he said of the proposal he co-sponsored with Councilman Lan Diep.
At the county level, supervisors Cindy Chavez and Joe Simitian introduced the proposal, which takes effect this weekend and applies to all 15 cities and unincorporated areas in the South Bay—except for jurisdictions with more restrictive fee caps.
“I’m pleased we were able to turn this around in a week to meet the urgency of the situation,” said Simitian, who initially brought the referral to the Dec. 8 Board of Supervisors meeting. “Many of these restaurants don’t have the infrastructure to host their own platforms for takeout and delivery, so they are often forced to accept the excessive fees and commissions, which can be up to 30 percent or more.”
Covid-related shutdowns already place an extraordinary burden on small restaurants, he noted, especially now that they’ve been limited to takeout only.
“Many of these businesses rely on third-party delivery vendors such as DoorDash, Uber Eats and Grubhub to meet their business’s delivery needs,” Simitian said. “While delivery vendors provide an important service, and are certainly within their rights to charge for such services, the current pandemic unfortunately creates opportunity for price gouging. That’s the problem we’re tackling.”