An increasing number of cities in Orange County are looking into limiting fees third-party food delivery apps, like Doordash and Uber Eats, can charge restaurants as residents stay home and order food through the services during the Coronavirus pandemic.
That’s what Buena Park — the latest city to act — did in February.
[Read: Buena Park Officials Crack Down on Food Delivery App Fees]
Now Huntington Beach is thinking of cracking down on these types of fees that can charge restaurants more than 30% of the cost of orders — often unknown to the customer on the other end.
The City Council could pass an ordinance on Monday to cap those fees at 15% for restaurants while limiting non-delivery fees for customers at 5% temporarily for roughly four months.
The meeting can be viewed via the city website here.
Councilwoman Natalie Moser first proposed such an ordinance at the council’s Feb. 1 meeting – just before elected officials decided not to strip Councilman Tito Ortiz of his Mayor Pro Tem title.
“A lot of restaurants intentionally avoided working with food delivery apps before the COVID-19 pandemic because the costs to their business just seemed too high,” she said during the meeting.
Moser said during the shutdowns, many of those restaurant owners decided to utilize those apps to keep their businesses alive and the smaller diners don’t always have the power to negotiate those fees with the third party services.
“In this moment in time, we’re just trying to do anything that we can to help our small businesses and our restaurants,” she said.
Ortiz agreed with her, but not all the council members were on board.
“I’ve never been one for Robin Hood politics,” Councilman Erik Peterson said. “It’s not something I can even support in a free market society.”
“Kudos on your caring and whatever, but I don’t think we should take from one to give to another to feel better,” he said.
Peterson added that it’s the governor’s restrictions that’s hurting business, not “DoorDash.”
Councilman Dan Kalmick said Huntington Beach has shown time and time again that Gov. Gavin Newsom doesn’t listen to them and criticized Peterson’s argument.
“I understand the complete free market, but if we go down that path — it’s prostitution, gambling, all these things should be legal — we should have no regulation on anything and it’s a silly strong man argument,” he said.
Councilman Mike Posey also said he can’t support such an ordinance.
“Government should not be in the business of effectuating price controls,” Posey. “It’s real simple to limit the cost of service and delivery: that’s competition. So if there’s more competition, that drives the price down.”
The council directed staff to come up with the ordinance with a 5-2 vote, with Peterson and Posey dissenting.
The ordinance would take effect immediately if council members approve it Monday.
Hosam Elattar is a Voice of OC Reporting Fellow. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.