Seattle will permanently cap food delivery app fees
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The Seattle City Council has voted to permanently cap the commission that food delivery apps can charge restaurants, extending a protection aimed at helping local businesses survive during the pandemic.
Why it matters: Without a cap in place, apps like DoorDash and Grubhub can take 30% or more of an order's purchase price as commission for delivery services, cutting into restaurants' often thin profit margin, according to a memo from city council staff.
Flashback: In 2020, the city limited delivery apps' maximum cut of an order to 15%.
- But that restriction is set to expire whenever the mayor decides to lift the city's COVID-19 civil emergency order.
- Jamie Housen, a spokesperson for Mayor Bruce Harrell, told Axios that the mayor hasn't set a date for that, but has encouraged the council to plan ahead.
The latest: The new measure the council passed Tuesday will ensure the 15% cap continues permanently, even after the emergency declaration is lifted.
- Apps will still be able to charge additional money for services that go beyond food delivery, such as marketing.
What they're saying: "Because Seattle's emergency order for the pandemic ends soon, our diverse local restaurants face a financial cliff unless we take swift action," Seattle City Council member Alex Pedersen said at Tuesday's council meeting.
The other side: Anna Powell, a government relations manager for DoorDash, told the council Tuesday that making the price cap permanent could lead to higher costs for customers, while hurting local restaurants and delivery drivers.
What's next: Houser said the mayor intends to sign the measure into law soon.