Part of the Food Policy Snapshot Series
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.
- Delivery Platforms Need to Give Restaurants a Break (Food and Wine)
- Delivery Was Never Going to Be the Answer (New York Magazine)
- How Safe Is It To Eat Takeout? (NPR)
- NYC Leaders Push Mayor to Cap Food Delivery Fees for Restaurants Following SF Mandate (Eater New York)
- By the Numbers: COVID-19’s Devastating Effect on the Restaurant Industry (Eater)
- Closed All At Once: Restaurant Industry Faces Collapse (NPR)
- Coronavirus: Restaurants Struggle Amid Fears of Outbreak (USA Today)
- Delivery Apps Refuse to Temporarily Decrease the Fees They Charge Restaurants (Eater San Francisco)
- DoorDash Eliminates and Reduces Some Commission Fees for Restaurants (CNBC)
- Mayor London Breed Announces Delivery Fee Cap to Support San Francisco Restaurants During COVID-19 Pandemic (Office of the Mayor – San Francisco)
- Ninth Supplement to Mayoral Proclamation Declaring the Existence of a Local Emergency Dated February 25, 2020 (Office of the Mayor – San Francisco)
- Proclamation by the Mayor Declaring the Existence of a Local Emergency (Office of the Mayor – San Francisco)
- Rolling Updates on Coronavirus Disease (COVID-19) (World Health Organization)
- San Francisco Caps Commissions for Food Delivery Apps at 15 Percent (SFist)
- San Francisco Caps Delivery Commission Rates (Food On Demand)
- San Francisco Emergency Order Says Delivery Apps Must Cap Restaurant Fees at 15 Percent (Eater San Francisco)
- San Francisco is Capping the Commission Delivery Companies Can Take After Some Restaurants Accuse DoorDash, UberEats, and Others of Taking Up to 30% of Their Revenue While They’re Already Struggling (Business Insider)
- SF Mayor Orders Cap to Third Party Delivery Fees to Keep Restaurants Afloat (NBC Bay Area)
- Social Distancing, Quarantine, and Isolation (Centers for Disease Control and Prevention)