Council extends fee cap for food delivery companies like DoorDash and Grubhub

Companies delivering food in Denver — such as Grubhub, DoorDash and Postmates — must make do a few more months with the 15% fee they’re able to charge restaurants.

On Monday night, the Denver City Council unanimously extended a 15% cap on those fees through mid-June. The fee cap originally passed in September and had been set to expire early next month.

DoorDash launched a $2 “Denver Fee” to recoup revenue lost by the cap.

But, widely, the fee cap has made a world of difference to local restaurants who are struggling through the pandemic, Brothers BBQ general manager Aaron Nelsen said. Before, the larger fees added up quickly.

“If you’re only doing 10 to 20 (delivery) orders a week, it was kind of gouging you,” he said.

Lower fees allows the locally owned chain to partner more easily with delivery companies, Nelsen said. The same is true for smaller restaurants, which often can’t afford their own delivery drivers.

Similar caps have been imposed on delivery companies in places such as San Francisco, Seattle and New York, and company representatives have spoken out against the measures.

“Pricing regulations can cause us to increase costs for customers, which could lead to fewer orders for local restaurants and fewer earning opportunities for Dashers,” a spokeswoman for DoorDash said in an email to The Denver Post. “We are eager to engage with policymakers on solutions that better support restaurants, customers and Dashers.”

Councilman Chris Hinds said while DoorDash has proposed increasing the cap to 20%, he is more inclined to reduce it to 10%. Plus, other changes take precedence.

“My personal priority is getting rid of that stupid $2 Denver Fee,” Hinds said.

Nelsen said he supports making the 15% permanent rather than raising it, because even an increase to 20% would cut into his restaurant profits.