L.A. may cap delivery app fees at 15% in an effort to help struggling restaurant industry

Jameson Carbonneau loads of carton of cooked meals from the Hard Rock Cafe in Hollywood, California for delivery on March 16, 2020 as the Coronavirus pandemic brings much of California to a standstill. (FREDERIC J. BROWN/AFP via Getty Images)

by: Los Angeles Times

Posted: Apr 27, 2020 / 07:12 PM PDT

Updated: Apr 27, 2020 / 07:15 PM PDT

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Los Angeles restaurant owners, who have been vocal about high service fees charged by food delivery apps, could soon pay significantly less if a new city ordinance is approved.

Restaurants currently pay as much as 30% in fees to third-party delivery apps such as Postmates, Grubhub and UberEats.

Under the proposed ordinance, introduced in a motion request from Los Angeles City Councilman Mitch O’Farrell, the apps could charge no more than 15% of the purchase price per order in fees during the COVID-19 pandemic.

“We want to do all we can to help improve their [restaurants’] chances of survival, and the worst thing we could do is not lean in when we see these cases that look a lot like price gouging,” O’Farrell said in an interview Monday. “We hear from our restaurants in the district a lot, and when we hear about this price gouging, it’s just unconscionable.”

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