PORTLAND, Ore. (KOIN) — On Wednesday, the Portland City Council adopted emergency temporary limitations on the fees that app-based food delivery services can charge restaurants during the pandemic.
Restaurants have been struggling to survive for months throughout the pandemic and now the city is taking action. Since restaurants shut down and takeout is still the primary option. Because of this, we’ve all become more familiar with apps like Door Dash, Caviar, Grub Hub, Uber Eats and Postmates — and more familiar with those delivery fees.
The Portland City Council says the restaurants, particularly the small family-owned ones in town, have limited bargaining power to negotiate lower commission fees with third party app-based delivery platforms.
Restaurants report that these app companies charge 25-30% compensation. Commissioner Chloe Eudaly says the excessive fees from these third parties put a substantial hardship on restaurants during a time of economic uncertainty.
“I do have to say that if your business model is predicated on gouging your clients and underpaying your workers, you need to find a new business model,” Eudaly said. “We can’t allow these companies to run unchecked and to price gouge and exploit during a crisis.”
That is why the city council voted unanimously on Wednesday to cap the app fees at 10% for restaurants that use drivers, along with capping feeds at 5% for restaurants that only use it for pick-up orders, or if they have their own delivery drivers.
The proposed ordinance takes effect immediately and will last for at least 90 days after the pandemic emergency declaration ends.
Companies will be fined $500 for every violation of the rules.
Although this is welcome news to small, family-owned businesses who’ve been hit hard, delivery drivers are sounding the alarm.
One delivery driver, Rebecca Cordelia, gave public testimony during the city council meeting, saying she’s out of work because of the pandemic and being a delivery driver is her only source of income at this time.
She’s now worried she will get a pay cut.
“The fees that you are trying to cap go directly to paying delivery workers,” Cordelia said. “I can’t afford to lose out on much-needed income because of a law that does more harm than good during times like these.”
The city council acknowledged that while people have lost their jobs, many have found work opportunities as delivery drivers for these delivery apps — so they added a provision to protect these gig workers.
The temporary ordinance prevents the app-based delivery companies from reducing pay for delivery drivers.
Jo Ann Hardesty and other commissioners addressed Cordelia’s concerns saying they know these out-of-state, multi-national companies can try and scare workers. Due to this, the council is urging drivers to come to them and report if you are seeing a drop in pay.