Mayor Todd Gloria signed an executive order Monday capping the fees third-party delivery apps charge to local businesses to help lessen the economic impact of COVID-19 on the restaurant industry.
Some of the third-party companies have imposed commissions, fees, and service charges of 30% or more to restaurants, creating an economic challenge for some small businesses throughout San Diego. The executive order places a 15% delivery fee cap and limits total fees at 18% for third-party delivery apps. The order will go into effect at midnight.
"In order to protect San Diego businesses and their employees that have sacrificed so much during the pandemic, it is necessary to temporarily restrict the fees imposed by third-party food delivery companies," Gloria said. "Capping the per-order fees will ease the financial burden on struggling businesses in our community, will keep food delivery options accessible to consumers, and is an important step to protecting the livelihoods of our neighbors."
Last week, Gloria received a request from Council President Pro Tem Stephen Whitburn along with Councilmembers Marni von Wilpert and Raul Campillo requesting he take the executive action to enact a temporary fee cap on third-party delivery apps operating in the city.
"Restaurants are part of the fabric of our neighborhoods, and many are at risk of closure," Whitburn said. "I applaud Mayor Gloria's quick response to provide this relief, which will help save small businesses and local jobs. Today's action shows what we can accomplish when we work together for our communities."
While restaurants have pivoted their business models to adapt to curbside pickup and delivery, third-party food delivery companies have become a popular option for businesses and consumers alike. These charges have led to consumers paying considerably more to have meals delivered, compared to the options of dining-in or ordering takeout.
The executive order will require third-party food delivery companies to charge a restaurant a delivery fee that totals no more than 15% of the purchase price of each online order. It also caps any additional fees at 3% of the purchase price of each online order.
Additionally, Gloria is allowing storefront businesses to temporarily place curbside pickup parking signage for parking spaces immediately adjacent to their storefront intended to allow restaurants to conduct more efficient pickup operations.
