Modesto city officials vote to cap food delivery fees for restaurants

2 min read

The Modesto City Council voted Tuesday to approve an urgency ordinance that will limit the fees food delivery companies can charge business owners.

a sign on the side of a building: The city of Modesto's councilmembers voted Tuesday to approve an urgency ordinance that will limit the fees food delivery companies can charge business owners.

© KCRA 3 Miguel Solorio
The city of Modesto’s councilmembers voted Tuesday to approve an urgency ordinance that will limit the fees food delivery companies can charge business owners.

Restaurants argue that they have been paying fees of up to 30% to delivery companies like DoorDash and Grubhub. Part of the fees includes a California driver benefits fee that goes toward the delivery person’s health care and insurance benefits.

The fee for drivers’ benefits was approved by voters in November 2020 with Proposition 22.

The new ordinance, which city spokesperson Thomas Reeves said would be temporary, will limit the fees to 15%.

“We want to do all we can to ensure the success as much as possible, for our local businesses, who are obviously hurting during this pandemic,” Reeves said.

In a statement sent to KCRA 3, DoorDash wrote the following:

“DoorDash has always supported restaurants. Pricing regulations could cause us to increase costs for customers, which could lead to fewer orders for local restaurants and fewer earning opportunities for Dashers. Pricing regulations can also remove options available to restaurants by limiting their ability to opt-in to additional services to help their business. We remain focused on working with policymakers to reach solutions that better support restaurants, customers, and Dashers.”

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