Alderman Wants Cap On Third Party Food Delivery Fees In Pandemic

CHICAGO — Ald. Matt O’Shea (19th) wants to cap fees on third-party delivery services to support the city’s struggling restaurants during a second COVID-19 banning inside service. The alderman is proposing an ordinance that would limit the cut delivery services take to delivery food orders.

“Throughout the COVID-19 pandemic, the use of services like Uber Eats, DoorDash, Grubhub and others has increased significantly,” O’Shea said in an email. “While these companies play a valuable role in our local economy, they often take up to 30 percent of the total purchase from the restaurant.”

O’Shea is proposing an ordinance capping the fees on third-party delivery services at 15 percent on food orders as a temporary measure to provide relief to the hospitality industry which he says is being decimated by the shutdown order.

“Today, if you made a $10 order through a third party delivery service, it’s likely the restaurant would receive only $7 of that bill,” the alderman said. “Even in good times, restaurants are an extremely low profit margin industry. Given this latest shutdown, we must do more to protect restaurants if we expect them to survive this pandemic.”

According to O’Shea, similar measures have been implemented in other larger cities including New York, Los Angeles, Philadelphia, Denver, and Seattle.

“Setting a reasonable fee cap will allow small, independent restaurants some much-needed cash flow and breathing room to help pay their staff, rent, and other expenses,” he said.