San Francisco Restaurant Delivery Apps Must Cap Commission Fees

by Marissa Sheldon
San Francisco Restaurant Delivery

Part of the Food Policy Snapshot Series

Policy name: Ninth Supplement to Mayoral Proclamation Declaring the Existence of a Local Emergency Dated February 25, 2020

Overview: San Francisco Mayor London Breed capped the commissions charged by food delivery apps in order to help local restaurants retain profits. 

Location: San Francisco, CA

Population: 0.88 million

Food policy category: Food services

Program goals: To help restaurants remain profitable while dine-in services are prohibited.

How it works: Restaurant delivery service apps such as Grubhub, Postmates, UberEats, Caviar and its parent company DoorDash, must cap the commissions they charge San Francisco restaurants at 15 percent. The emergency order will remain in place until restaurants in the city are able to re-open for dine-in services. 

Progress to date: The mayor announced the temporary mandate on April 10, 2020. 

Why it is important: Social distancing guidelines due to the COVID-19 pandemic have taken a toll on the restaurant industry, as Americans first chose and then were ordered not to eat in restaurants. On February 25, San Francisco initiated a shelter-in-place order that required restaurants to provide only take-out and delivery services. With no dine-in and fewer take-out or delivery customers, the 30 to 50 percent of restaurants that have remained open have seen large declines in sales. 

Third-party delivery services typically charge restaurants a 10 to 30 percent commission fee, which can significantly cut into the restaurant’s profit margin. The cap on these fees is meant to support local restaurants and keep their businesses viable for the duration of the shelter-in-place order. 

Program/Policy initiated: The cap on fees was initiated on April 10, 2020. 

Point of contact: 
Office of Mayor London N. Breed
Phone: (415) 554-6141
Email: [email protected] 

Similar practices: On March 17, DoorDash announced that independent restaurants could join DoorDash and Caviar free of charge and their commission fees would be waived through the end of April. Those restaurants already participating in these delivery programs had their commissions reduced. 

Evaluation: Formal evaluation has not yet been conducted. 

Learn more:

References:

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