Seattle permanently issues 15% cap on food-delivery fees

Aug 3, 2022, 2:51 PM

(Photo by Michael M. Santiago/Getty Images)...

(Photo by Michael M. Santiago/Getty Images)

(Photo by Michael M. Santiago/Getty Images)

The Seattle City Council voted to permanently implement a 15% cap on delivery fees that companies — including DoorDash, Grubhub, and Uber Eats — use to charge local restaurants.

The cap has been in place since April 2020 when it was implemented as part of an emergency order to manage the financial hardship small businesses faced under shutdown orders during the pandemic.

As of March 2020, 38% of American consumers had ordered food through a food delivery app. One year later, the number jumped nearly 10 points as 47% of Americans had used a food delivery app.

Food delivery is an integral part of the food industry as 53% of survey respondents — and 64% of millennial respondents — said that food delivery and takeout are “essential to the way they live,” according to QSR.

 The new legislation was sponsored by Councilmembers Dan Strauss (District 6) and Alex Pedersen (District 4).

This small business legislation capping fees charged by delivery companies is vital to support Seattle’s diverse restaurants,” Pederson said. “Over the past two years, the 15% cap has proven to be reasonable as well as vital for supporting Seattle’s diverse restaurants that have struggled mightily to survive in our city. Because Seattle’s Emergency Order for the pandemic could end soon, this legislation saves our local restaurants from a financial cliff.”

Gov. Jay Inslee announced last week that he will rescind 12 decrees under his COVID-19 emergency authority, saying they are no longer needed in response to the pandemic as the city pivots to post-pandemic practices.

Inslee to rescind 12 emergency decrees related to COVID-19

Hazard pay for grocery workers also ended after a 5-2 decision from Seattle City Council yesterday, citing that hazard pay was never intended to be long-term or a way to combat inflation. It was always tied to COVID-19, not consumer prices.

“As everyone knows, restaurants were the hardest hit throughout the pandemic,” said Steve Hooper, President of the Seattle Restaurant Alliance. “Today’s vote making the 15% commission cap permanent ensures the best customer experience by keeping delivery a viable option as restaurants navigate post-pandemic challenges and gives restaurants much-needed assistance and predictability without additional financial hardship as they seek to recover and thrive.”

Without the limitation, some delivery companies reportedly charged restaurants fees as high as 30% prior to the pandemic.

With the legislation passing by the full city council, it will go to the mayor for his signature. If signed, it will go into effect 30 days afterward.

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Seattle permanently issues 15% cap on food-delivery fees