Chicago Latest City to Cap Delivery Fees to Aid Restaurants
Chicago Latest City to Cap Delivery Fees to Aid Restaurants
(Bloomberg) -- The Chicago City Council approved a measure to cap delivery fees third-party delivery services can charge restaurants as part of an effort to assist eating and drinking establishments struggling to make ends meet during another indoor dining ban.
Chicago joins municipalities from New York City to Los Angeles to cap such fees. The ordinance approved unanimously on Monday limits the fees that delivery service operators can charge restaurants to 10% of the purchase price, and bans total costs from exceeding 15% of a restaurant’s monthly net sales processed through the service. The move comes after Governor J.B. Pritzker banned indoor dining in Illinois as part of his efforts to curb a resurgence of Covid-19.
Chicago’s restaurants are among the sectors that have been “badly” impacted by Covid-19, Mayor Lori Lightfoot said during Monday’s council meeting. The industry was hobbled during the state’s initial stay-at-home order in March that was followed by indoor capacity restrictions in the summer and early fall. The city council’s measure is in response to the financial stress restaurants are experiencing from a drop in business amid the pandemic, which is leading to closures and lay offs. The ban on indoor dining has led to a greater reliance on services such as those provided by DoorDash Inc. and other third-parties.
The cap will be repealed without any action by the council when indoor dining is allowed at 40% or more capacity in the city for 60 consecutive days.
Such regulations could cause higher costs for restaurants’ customers and lead to fewer orders, Campbell Matthews, a spokesperson for DoorDash, said in an email before the council’s vote. The company is “focused on solutions that preserve choice and ensure Chicagoans can continue to access safe and affordable food delivery,” Matthews said.
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