Charged app fees limited by city, county

The temporary ordinance will cap delivery cost paid by restaurants at 15%

Santa Clara County and Silicon Valley’s largest city, San Jose, on Tuesday both unanimously approved new caps on how much money delivery services like DoorDash and Uber Eats can charge struggling restaurants across the county during the COVID-19 crisis.

A temporary county ordinance — adopted as an emergency regulation tied to the county’s coronavirus pandemic response — will cap delivery fees at 15% of the purchase price for orders from any restaurant in the county. The ordinance is set to expire when restaurants are permitted to resume indoor dining at full capacity or at the end of the county’s emergency declaration.

The county and San Jose join a handful of jurisdictions across California, including Los Angeles, Hayward and Newark, to pass such restrictions.

Jenneke de Vries, the owner of Pizza Bocca Lupo in San Jose’s San Pedro Market Square, called the new cap “a lifeline” for restaurants like hers that are struggling mightily. This, she said, will help them

“get through this tough winter ahead and to the end of the pandemic, hopefully at the end of the summer.”

Since the start of the pa ndemic nea rly nine months ago, restaurateurs have scrambled to figure out new ways to weather the pandemic and the ever- chang ing county guidelines. And after months of adapting to mostly outdoor dining setups and preparing to continue offering an outdoor dining experience during the winter months, the latest lockdown and takeout and delivery- only mandate have made matters worse.

On top of that, food delivery platforms like Uber Eats and DoorDash are charging businesses who rely on such services upward of 30% in commissions and fees, according to county and city officials.

San Jose Council member Raul Peralez, who represents the city’s downt ow n c ore , ma de h is stance clear: “Taking that big of a hit is not allowing (small businesses) to succeed. And if we don’t make a difference there, then I think we’re going to see more of those businesses go out of business, unfortunately.”

Ryan Summers, the owner of Good Karma in downtown San Jose, echoed his sentiment , stating that he sees more doors permanently closing every day.

“Downtown small businesses feel abandoned during this crisis, but this bit of advocacy is certainly a positive step toward sustaining the downtown economy, which is honestly on its last leg,” Summers said during the San Jose council meeting.

County Supervisor Mike Wasserman said he hoped the temporary ordinance would allow the restaurant industry to “tread water” the next several weeks until it hopefully can resume outdoor dining again.

“I understand that there’s a lack of fees to DoorDash and other food service-type providers, but I think everyone is giving up a little something during this time and it’s the way for the majority of us to get through this,” Wasserman said.

Though the county’ s emergency ordinance will apply to deliveries from all restaurants in Santa Clara County, cities are permitted to adopt more stringent ordinances if they choose. San Jose’s ordinance mirrors the county’s by capping delivery fees at 15% but also requires that total fee amounts for the services of delivery companies — including the delivery and processing fees — be capped at 18% of the price of an online order. Chains with more than four restaurants, grocery stores and convenience stores do not qualify for the city’s relief.

San Jose Mayor Sam Liccardo said he was grateful that the city could “reach a compromise with food delivery companies services like DoorDash” and that he expected the cap to “relieve the burdens of hundreds of our struggling restaurants paying high delivery service fees.”

Council member Dev Davis, who typically doesn’t support the government interfering with markets, said that the extraordinary times called for extraordinary measures like this.

“I’m extremely concerned for our small businesses ,” Davis said during Tuesday’s council meeting. “They happen to employ a large number of our residents here in our community, and we need to do everything we can to keep our businesses operating safely and to keep people employed.”