Protect Our Restaurants Praises NYC & LA Delivery Fee Cap Extensions

August 27, 2020 Press Release

For Immediate Release: August 27, 2020 

Press Contact: Robyn Shapiro, rshapiro@economicliberties.us 

Protect Our Restaurants Praises NYC & LA Delivery Fee Cap Extensions

Washington, D.C. – Following New York City and Los Angeles’ votes to extend caps on the commissions third-party delivery apps like Grubhub and DoorDash are allowed to charge restaurants, the Protect Our Restaurants campaign issued a statement in support of the legislation and urged local policymakers across the country to enact similar measures to protect their communities and restaurants from the predatory and anti-competitive practices of the Silicon Valley delivery app cartel.

“Most customers have no idea that when they order food over Grubhub or DoorDash, at least 30% of the money they pay for the food goes straight to the delivery apps. They think they are paying for delivery through fees and surcharges. But the truth is that most restaurants that are surviving this pandemic are spending substantially more on delivery app commissions than they are on rent, and unless that changes they won’t be able to survive much longer,” said Kristen Corral, a veteran animal welfare activist and co-founder of the Las Vegas restaurant group Tacotarian, who led the coalition of independent restaurants that asked commissioners to draft a recently passed 15% fee cap in Clark County, Nevada.

DoorDash, GrubHub, Postmates, and UberEats control 98 percent of all food delivery sales. They use this dominance to bully both restaurants and their couriers into payday lender-like relationships, extracting as much as 65% of restaurants’ takeout and delivery revenues while paying drivers barely enough to pay for gas and payroll taxes.

In response, more than two dozen cities, states, and municipalities, from Los Angeles to St. Louis to Cincinnati to the state of New Jersey, have independently passed delivery app fee caps. Still, at least three of the four dominant players have consciously refused to comply with caps passed in Portland, Washington D.C. and San Francisco. This is no surprise: the apps have also brazenly flouted tax laws, blue laws, and the AB-5 labor law passed in January to protect gig workers in California. 

“To local, small restaurants, fee caps like those passed in New York City and Los Angeles represent a potential path of survival,” said Katy Connors, executive director of the six-month-old Portland Independent Restaurant Alliance, which led a successful campaign to pass a fee cap in Portland in July. “But as we’ve seen in Portland, these predatory delivery apps are all too willing to break the law. To protect its restaurants, New York City and Los Angeles must ensure this fee cap is enforced.”

Cities, states, and municipalities that have recently passed fee caps include: Berkeley, CA; Boston, MA; Cambridge, MA; Chicago, IL; Cincinnati, OH; Contra Costa, CA; Fremont, CA; Glendale, CA; Hoboken, NJ; Jersey City, NJ; Livermore, CA; Los Angeles, CA; Marin, CA; Mill Valley, CA ; New York, NY; Napa, CA; New Jersey; Oakland, CA; Pasadena, CA; Philadelphia, PA; Portland, OR; Saint Louis, MO; San Francisco, CA; San Jose, CA; San Leandro, CA; San Mateo, CA; Santa Clara, CA; Santa Cruz, CA; Santa Monica, CA; Seattle, WA; and Washington, D.C.

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ProtectOurRestaurants.com is a project of The American Sustainable Business Association, The American Economic Liberties Project, and the Institute for Local Self-Reliance. For more information, please visit ProtectOurRestaurants.com.