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Los Angeles City Council Votes to Extend Delivery Fee Cap on Third-Party Apps

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A motion proposes an extension of the current 15 percent cap, with companies facing prosecution if they don’t comply

A person wearing a mask walks by signs for delivery/take out display in front of a restaurant in West Hollywood.
A person wearing a mask walks by signs for delivery/take out display in front of a restaurant in West Hollywood
Photo by VALERIE MACON/AFP via Getty Images

On Wednesday, the Los Angeles City Council unanimously voted in favor to extend an emergency ordinance that limits fees for third-party delivery services. The ordinance was approved by the council on May 20 and caps fees for services like GrubHub, Uber Eats, Postmates, and DoorDash to 15 percent of the cost of any food order for delivery fees. The current ordinance is set to expire on August 31.

This week’s motion asks LA city attorneys to draft an extension, according to the Los Angeles Times. The ordinance will keep the 15 percent cap in place until well after the coronavirus pandemic subsides — specifically 90 days after restaurants can operate at full capacity.

In July, several Los Angeles restaurants complained that certain third-party delivery apps were in violation of the fee cap law because they were still charging the typical 30 percent fee. According to an August 14 report by LA’s chief legislative analyst, Sharon M. Tso, 72 percent of surveyed restaurants reported being overcharged by delivery apps from July 29 to August 10.

Management for Antica Pizzeria da Michele claim they still haven’t received reimbursement for the fee cap difference last month. The council tried to address this issue by proposing penalties for delivery services that overcharge restaurants during state, federal, and local emergencies, and will use criminal prosecution for those in violation of the order.

The council is busy this week and introduced additional motions designed to help LA businesses in the long term. Councilmember David Ryu filed a motion to permanently extend the LA Al Fresco program, which makes it easier for restaurants to set aside additional outdoor dining space in parking lots, sidewalks, and alleyways.