Buena Park residents could see much more local restaurants appearing on third-party food delivery service apps like Doordash, Postmates and Uber Eats, city officials say.
That’s because the City Council earlier this month voted to crack down on the fees those apps can charge local restaurants for delivering their food to customers who order online — often unbeknownst to the customer making the order.
In a new emergency order the council approved on Feb. 9, food delivery apps can no longer charge restaurants delivery fees of more than 15% of the purchase price of each online order.
The five-member decision was nearly unanimous, with Councilwoman Beth Swift dissenting over concerns about enforcement and the regulatory spirit of the new ordinance.
In addition to limiting fees on restaurants, the new law also forces apps to disclose the amount of money they’re charging the restaurant for every order — not just the customers and app users ordering the food.
City officials say the apps’ charges to local restaurants often suck up their profits and force them to uptick the price of their menu items on the app. With the law now in place, officials say it could save both businesses and residents money.
The new order doesn’t reduce fees imposed on customers, officials say — only those leveled on the restaurants. But with the new restrictions, they say restaurants won’t have to uptick their menu items’ prices on the app to make up for the fees they have to pay.
It comes as city officials say more and more people during the pandemic are ordering food through the apps for the convenience and from the safety of their homes as the threat of virus transmission remains.
The law will only be in effect for as long as the city’s Coronavirus pandemic state of emergency is in place.
Apps that violate the policy could see the city in court, according to the text of the new law.
It came at the request of City Councilwoman Sunny Park, who said other cities and state officials had been exploring such policies.
Indeed, city staff said they modeled much of their ordinance on the new proposed state Assembly Bill 286, which imposes the same restrictions on the apps and “follows the recent local City Council ordinances passed in many other cities in California” such as Long Beach, Los Angeles, Pasadena, Santa Monica, Berkeley, and Oakland.
Reached for comment, a Doordash spokesperson said the company “has always supported restaurants.”
The spokesperson spoke only on background in the written statement, which was emailed.
The statement noted that “pricing regulations could cause us to increase costs for customers, which could lead to fewer orders for local restaurants and fewer earning opportunities for Dashers,” the spokesperson said, adding “pricing regulations can also remove options available to restaurants by limiting their ability to opt-in to additional services to help their business.”
The Buena Park ordinance wasn’t supported by everyone on the council, with Swift saying before the vote that she’s happy to pay the extra prices because of the service being provided and that eating out is “a luxury.”
“Eating out is a luxury, no matter if it’s McDonald or something else … getting delivery is just part of that luxury also,” she said, also adding “I feel that we wouldn’t be able to enforce it very well.”
City Attorney Chris Cardinale said he’s not aware of any legal challenges to the policy by any of the apps in any of the other cities that passed such laws.
Mayor Connor Traut, who supported the item, before the vote criticized the food delivery apps for not showing customers the full breakdown of the charges that the restaurants have to pay.
“I feel like I’m being misled by companies like Doordash when they show me the fees. These are just the fees I’m paying — we’re not actually told the fees the restaurants have to pay,” Traut said. “A requirement for the full fee breakdown is helpful for consumers to know how much is being charged.”
He later added: “If these rates are set on our end today, it’s going to make restaurants more incentivized to now sign up for all these delivery services, which in turn means all these residents are going to see more options for Buena Park.”
Brandon Pho is a Voice of OC reporter and corps member at Report for America, a GroundTruth initiative. Contact him at firstname.lastname@example.org or on Twitter @photherecord.