One restaurant owner is hoping to follow major cities such as Chicago, Los Angeles, and San Francisco to put a cap on the amount of money third-party delivery apps can charge restaurants.
Kristen Corral, one of the founders of Tacotarian, the vegetarian Mexican restaurant in the southwest and the Arts District, is leading a charge with Clark County Commissioner Tick Segerblom to put an ordinance in place that would cap fees from third-party apps.
“This has already been done in a number of cities across the U.S.,” she writes in an email appealing to restaurants to jump on board. “As we all navigate this new normal, I’m sure you are all finding that the fees from these apps are astronomical and in some cases the monthly payouts are more than rent. However, some restaurants feel they need to use the apps because they can’t yet facilitate their own delivery due to insurance and infrastructure. We feel that putting a cap on the fees as well as continuing to educate our customers would make a huge difference for small businesses.”
Third-party apps such as Postmates, GrubHub, and Uber Eats charge up to 30 percent from each order, in some cases even if a customer orders curbside pickup or takeout. “In a pre-pandemic world, these apps may have been a small part of a restaurants business, but now due to this global crisis we and many of our fellow restaurant owners are doing between 50 percent to 100 percent takeout/delivery. That fee being substantially cut down could be the difference in paying rent or being evicted,” Corral writes.
And while it seems easy to simply drop the third-party apps, restaurant owners say their insurance rates will escalate if they offer in-house delivery, and some insurance companies do not cover in-house delivery drivers.
On May 20, the LA City Council passed a 90-day ordinance that capped delivery fees for restaurants at 15 percent, while also limiting non-delivery fees, such as arranging pickup and takeout order, at five percent of the total sale. San Francisco passed a similar delivery fee cap on April 10.
Commissioner Segerblom plans to introduce the delivery app cap at the Clark County Commissioners this week, Corral says. If the movement to cap delivery app fees moves forward in unincorporated Clark County, Corral says she will try to introduce the measure with the City of Las Vegas as well.