When a customer places an order for takeout or food delivery through a third party app like DoorDash, Grubhub or UberEats, the restaurant they are ordering from has to pay a sizable fee to the app. Restaurants have reported this fee can be as high as 40 percent of the order.
With the goal to prevent third party food takeout and delivery apps from charging high service fees to restaurants during the COVID-19 pandemic, legislation sponsored by Assemblywoman Annette Quijano (D-Union) was approved Thursday by the full Assembly, 75-1-2. It passed the Senate 39-0 in May and now heads to the Governor’s desk.
The measure (A3978) would prohibit apps or websites from charging restaurants service fees higher than 15 percent of the order during a state of emergency lasting longer than seven days.
Assemblywoman Quijano released the following statement:
“Since the COVID-19 pandemic began, restaurants have been limited to offering takeout and delivery options to customers. As a result, customers have been turning to food takeout and delivery apps to simplify the process of ordering food from their favorite restaurant. It’s likely many don’t know that the restaurant they are trying to support is actually paying an enormous fee to the app they’re ordering from.
“There’s no reason for apps to be charging outlandish fees to restaurants during the middle of a global public health emergency. Apps can be a vital tool in helping restaurants stay in business, but that won’t be the case if they are charging unreasonable fees. It’s time we put a stop to this unfair practice and ensure restaurants will only be responsible for a fair fee per order.”