Cincinnati councilman wants to limit fees, commissions food delivery apps charge restaurants

At Tickle Pickle in Northside, Raymond Bowman has a menu lots of people find hard to resist.”Burgers and shakes, they’re always going to want a burger and a shake,” Bowman said.These days, with margins razor thin because of the coronavirus, Bowman is grateful when customers come to his shop to order a carryout meal in person. When that happens, Bowman doesn’t have to pay a fee to a delivery company like DoorDash or GrubHub.”The percentage is too much,” he said.In some cases, the delivery fee that companies running food delivery apps charge restaurants can reach 30 percent.Breyahnna Hill, who lives in Over-the-Rhine, thinks food delivery costs in general have gotten out of whack.”I don’t understand it,” Hill said. “So it’s better for me to just walk in or drive up and get my food.”On Wednesday, Cincinnati Councilman P.G. Sittenfeld said what he calls sometimes “exorbitant” fees delivery companies charge to restaurants in the city need to be capped at 15 percent, at least until restaurants in the city no longer face restrictions related to the coronavirus.”This is about going to bat for the people that make this community what it is,” Sittenfeld said. “Government is not taking over their thing. We’re saying, ‘Let’s make this fair.’ And 30 percent is not fair and it’s hurting our local community.”Kristen Bailey with Sweets and Meats BBQ in Mt. Washington joined other restaurateurs to support Sittenfeld’s proposal.”My margin is only 25 to 30 percent, so if they’re taking 30 percent from me, I’m not making anything,” Bailey said.Sittenfeld knows there’s concern for drivers who deliver food for companies that also include Postmates and Uber Eats. Sittenfeld he worries about those drivers, too, but says it’s critical that restaurants remain open.”Anyone who cares about the drivers, as I do, needs to care about the restaurants first, because if we don’t save the restaurants, there’s not going to be any food to deliver,” Sittenfeld said.WLWT investigator Todd Dykes reached out to DoorDash, Postmates, GrubHub and Uber Eats.Three of the four companies sent the following statements:”Commissions are privately negotiated agreements between the restaurant or a consumer goods business and the Postmates platform. We work closely with our business partners to build a custom agreement that reflects the services they ask us to provide to their business, these services are things like paying and providing benefits to delivery couriers, marketing, customer service, courier support, exposure to new customers, and insurance. Commissions are not “fees”, they are the main source of revenue for our company and they are how we pay for the services that we provide to businesses and our customers. Arbitrarily setting on-demand delivery prices has real consequences that undermine our ability to operate, fund relief efforts and benefit programs for merchants, couriers and customers, and kills the whole industry’s ability to provide the services restaurants need to stay open during this national emergency.” — PostMates”Restaurants have the option to choose different services at different commission levels. With Uber Eats, they can choose to pay a lower commission and pay for full-time delivery people themselves. Many restaurants don’t have the resources to do that and they choose to have Uber Eats cover all the costs and logistics of delivery. This law would simply shift the costs back onto small, local restaurants who can afford it the least.” — Uber, on behalf of Uber Eats”Any cap on fees — regardless of the duration — will result in damaging, unintended consequences for locally-owned businesses, delivery workers, diners and the local economy; in fact, it will result in the exact opposite of what the legislation is designed to accomplish. We believe that any cap on fees represents an overstep by local officials and will not withstand a legal challenge. In reality, this proposed cap will lower order volume to locally-owned restaurants, increase costs – and headaches for – small business owners, and raise costs to customers. Delivery workers, who are currently relying on Grubhub to earn an income including 100 percent of tips from diners, would have fewer work opportunities and lower earnings.” — GrubHub

At Tickle Pickle in Northside, Raymond Bowman has a menu lots of people find hard to resist.

“Burgers and shakes, they’re always going to want a burger and a shake,” Bowman said.

These days, with margins razor thin because of the coronavirus, Bowman is grateful when customers come to his shop to order a carryout meal in person. When that happens, Bowman doesn’t have to pay a fee to a delivery company like DoorDash or GrubHub.

“The percentage is too much,” he said.

In some cases, the delivery fee that companies running food delivery apps charge restaurants can reach 30 percent.

Breyahnna Hill, who lives in Over-the-Rhine, thinks food delivery costs in general have gotten out of whack.

“I don’t understand it,” Hill said. “So it’s better for me to just walk in or drive up and get my food.”

On Wednesday, Cincinnati Councilman P.G. Sittenfeld said what he calls sometimes “exorbitant” fees delivery companies charge to restaurants in the city need to be capped at 15 percent, at least until restaurants in the city no longer face restrictions related to the coronavirus.

“This is about going to bat for the people that make this community what it is,” Sittenfeld said. “Government is not taking over their thing. We’re saying, ‘Let’s make this fair.’ And 30 percent is not fair and it’s hurting our local community.”

Kristen Bailey with Sweets and Meats BBQ in Mt. Washington joined other restaurateurs to support Sittenfeld’s proposal.

“My margin is only 25 to 30 percent, so if they’re taking 30 percent from me, I’m not making anything,” Bailey said.

Sittenfeld knows there’s concern for drivers who deliver food for companies that also include Postmates and Uber Eats. Sittenfeld he worries about those drivers, too, but says it’s critical that restaurants remain open.

“Anyone who cares about the drivers, as I do, needs to care about the restaurants first, because if we don’t save the restaurants, there’s not going to be any food to deliver,” Sittenfeld said.

WLWT investigator Todd Dykes reached out to DoorDash, Postmates, GrubHub and Uber Eats.

Three of the four companies sent the following statements:

“Commissions are privately negotiated agreements between the restaurant or a consumer goods business and the Postmates platform. We work closely with our business partners to build a custom agreement that reflects the services they ask us to provide to their business, these services are things like paying and providing benefits to delivery couriers, marketing, customer service, courier support, exposure to new customers, and insurance. Commissions are not “fees”, they are the main source of revenue for our company and they are how we pay for the services that we provide to businesses and our customers. Arbitrarily setting on-demand delivery prices has real consequences that undermine our ability to operate, fund relief efforts and benefit programs for merchants, couriers and customers, and kills the whole industry’s ability to provide the services restaurants need to stay open during this national emergency.” — PostMates

“Restaurants have the option to choose different services at different commission levels. With Uber Eats, they can choose to pay a lower commission and pay for full-time delivery people themselves. Many restaurants don’t have the resources to do that and they choose to have Uber Eats cover all the costs and logistics of delivery. This law would simply shift the costs back onto small, local restaurants who can afford it the least.” — Uber, on behalf of Uber Eats

“Any cap on fees — regardless of the duration — will result in damaging, unintended consequences for locally-owned businesses, delivery workers, diners and the local economy; in fact, it will result in the exact opposite of what the legislation is designed to accomplish. We believe that any cap on fees represents an overstep by local officials and will not withstand a legal challenge. In reality, this proposed cap will lower order volume to locally-owned restaurants, increase costs – and headaches for – small business owners, and raise costs to customers. Delivery workers, who are currently relying on Grubhub to earn an income including 100 percent of tips from diners, would have fewer work opportunities and lower earnings.” — GrubHub


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