City Council Signals Support for Capping Food Delivery Service Fees

The City Council last week cast its support for Los Angeles County officials to enact a policy limiting delivery services’ fees on local restaurants, a measure that was formally considered this week by the Los Angeles City Council.
Restaurant owners have been complaining that third-party delivery apps such as Grubhub, Postmates and UberEats charge them high fees for their services, Councilwoman Marina Khubesrian explained during the special meeting last week. Those services sometimes charging up to 70% of the cost of the food, Khubesrian added.
After some debate, the City Council ultimately decided to send a letter of support to the county and the San Gabriel Valley Council of Governments promoting the regulation.
The goal, councilmembers said, was to get a countywide mandate rather than have cities place individual regulations. Some restaurants had expressed concerns that, if South Pasadena was to move forward with its own limit without support from other cities, the services would simply leave — removing a major source of business for venues with few options during the coronavirus pandemic.
“Certainly, the businesses would be happy to have some sort of a cap,” Laurie Wheeler, president and CEO of the South Pasadena Chamber of Commerce, said during the meeting, “but the general feeling with the few restaurants that I’ve spoken with is they just don’t want to take the risk of us being the only one that does it.”
The L.A. City Council planned to discuss and vote on an ordinance limiting delivery services to a 15% charge on the order at its Wednesday meeting, which began after press deadline this week.
Councilman Michael Cacciotti added that, based on the severity of the service charges, the city should call on the state Department of Justice to investigate price gouging. He suggested that South Pasadena could take on a similar role as it did several few years ago, when it pushed the state to regulate massage parlors.
“We took the lead, other cities jumped onboard, and we got it at the state level,” said Cacciotti, who is a deputy attorney general with the state. “We can do it again.”
However, City Attorney Teresa Highsmith said that it would first need to be determined whether the delivery services were charging higher fees than normal during the pandemic.