The Los Angeles City Council voted unanimously Wednesday to extend a limit on third-party food delivery apps that keeps them from charging more than 15% of an order to restaurants.
The extension of the ordinance also caps non-delivery fees to no more than 5% and ensures all customer tips go to the delivery person. The original provisions of the delivery app fees, which were set in early June, were set to expire Monday.
“Local restaurants were impacted by exorbitant delivery fees long before the pandemic struck, and in recent years, the use of delivery apps has monopolized delivery services for most restaurants,” said Councilman Mitch O’Farrell, who introduced the limits.
The ordinance will end 90 days after the prohibition of indoor on-site dining has been lifted, and it allows for private right of action if the delivery company does not hear an alleged violation within 15 days from receiving a notice.
O’Farrell said the COVID-19 pandemic laid bare the vulnerabilities restaurants faced by having to rely on delivery of services, as some of them had lost up to 95% of their delivery sales.
“This is still about local interests over Wall Street interests, and the action to extend this ordinance could very well ensure that our favorite local restaurants — the ones that are remaining — can survive this pandemic,” he said.
Alternatives like the L.A. Al Fresco program that provides permits to restaurants to hold outdoor dining, are another critical tool to help some — but not all — restaurant operations, O’Farrell said.
“We’ve heard firsthand about restaurants that don’t have the possible infrastructure or resources to implement this,” O’Farrell said. “Restaurants need as many options as possible to help get them through this difficult time.”
The councilman said the Economic Workforce and Development Department and the Chief Legislative Analyst’s Office conducted a survey of restaurant owners, and 73% reported the limit on delivery charges has been beneficial during the COVID-19 pandemic. About 95% of restaurants reported that they would like the ordinance to be extended.