Expiration of Urgency Ordinance
1603-2020 temporarily capping
commissions charged by thirdparty delivery and pick-up service platforms.
Katie Donner, Management Analyst I
Economic & Community Development Department
Government Code Section 54957.5
SB 343 Item
Agenda: 06/14/2023
Reg CC - Item #13
Timeline
▪ August 26, 2020 - City Council approved Urgency Ordinance 1603- 2020 establishing a temporary cap on commissions charged by thirdparty food delivery services affecting local restaurants during the COVID-19 pandemic
▪ February 28, 2023 – local state of emergency for COVID-19 ended ▪ August 27, 2023 – 180 days after local state of emergency ends and when urgency ordinance 1603-2020 expires
Survey Findings
▪ 75% of businesses reported that they are still relying on third-party apps for a significant portion of their business.
▪ 100% of businesses reported they use DoorDash, Uber Eats, and GrubHub, with 25% of those respondents also using Toast.
▪ 75% of businesses reported that they also have their own online ordering system because it is cheaper than the third-party application platforms. ▪ Businesses reported they are currently paying 20-45% to accept orders from third-party apps for delivery and that they are not receiving any add-on support for their service. ▪ 100% of businesses reported that they do want the City Council to consider adopting a permanent restriction on commission caps.
▪ Businesses are split down the middle on their opinions on the tiered commission cap system, largely with concerns about the fees that customers are already paying and if businesses opt for the lower end of the commission cap tier, it can impose more fees onto the customer, and can in turn lose customers for the businesses if the fees are too high.
DoorDashTiered Plan
GrubHubTiered Plan
UberEatsTiered Plan
Option 1 – Create Permanent Tiered
Commission Cap System
-Option that San Francisco and the app
platforms came to an agreement on after
being sued for placing a permanent
commission cap.
-Third-party app platforms already have a
tiered system in place
Option 2 – Allow Ordinance to End with
No Further Action
-Staff can revisit this item in six (6) months by
following up with merchants to see how their
businesses are doing with no commission cap and
City Council can determine if they are comfortable
with the decision they made or if they would like
to reconsider the permanent cap.
-Consistent with all the other suburban
municipalities in the County and Bay Area.