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Illustration: Aïda Amer/Axios

San Francisco on Friday announced a temporary 15% cap on fees delivery companies can charge restaurants during the coronavirus crisis.

Why it matters: Food delivery has skyrocketed as residents remain confined in their homes except for essential trips. The service has become the primary source of revenue for restaurants as they can no longer serve on-site patrons.

  • Typically, third-party delivery companies charge fees to the customer and also take a commission from the restaurants.

Between the lines: While some companies have slashed fees for customers during the COVID-19 outbreak to incentivize them to order more, restaurants have complained that high fees eat into their already-reduced revenues.

Yes, but: Critics of such fee caps argue this leads to unintended consequences like lower incentives for the delivery companies to work with specific restaurants or in certain areas, change how they pay drivers, or shift fees to customers to make up for lost money (and potentially decreasing demand for delivery).

  • "In the face of this new policy shift, we are going to give restaurants the ability to pass some of these optional costs onto consumers," a GrubHub spokesperson said of the additional fees it charges restaurants for services beyond delivery, which add up to more than 15%.
  • Uber Eats said that "regulating the commissions that fund our marketplace—particularly during these unprecedented times—would force us to radically alter the way we do business, set a far-reaching precedent in a highly competitive market, and could ultimately hurt those that we’re trying to help the most: customers, small businesses and delivery people."
  • Pointing to an announcement the day before of cutting its restaurant fees by half, DoorDash added: "We are reviewing the Mayor’s order, including the legal basis for such an extraordinary unilateral action, and will respond accordingly."

Editor's note: The story has been updated with comments from delivery companies.

Go deeper

5 hours ago - Politics & Policy

Scoop: Sources say Beto plans Texas comeback in governor’s race

Former U.S. Rep. Beto O'Rourke speaks during the Georgetown to Austin March for Democracy rally on July 31, 2021, in Austin, Texas. Photo: Brandon Bell/Getty Images

Former Rep. Beto O’Rourke is preparing to run for governor of Texas in 2022, with an announcement expected later this year, Texas political operatives tell Axios.

Why it matters: O'Rourke's entry would give Democrats a high-profile candidate with a national fundraising network to challenge Republican Gov. Greg Abbott — and give O’Rourke, a former three-term congressman from El Paso and 2020 presidential candidate and voting rights activist, a path to a political comeback.

Texas doctor says he performed an abortion in violation of state law

Pro-choice protesters march down Congress Avenue and back to the Texas state capitol in Austin, Texas, in July 2021. Photo: Erich Schlegel/Getty Images

A Texas doctor disclosed in an op-ed in the Washington Post on Saturday that he has performed an abortion in violation of the state's restrictive new abortion law, which effectively bans the procedure after six weeks.

Why it matters: Alan Braid's op-ed is a direct disclosure that will very likely result in legal action, thereby setting it up as a potential test case for how the abortion ban will be litigated, notes the New York Times.

Mike Allen, author of AM
6 hours ago - Technology

Axios interview: Facebook to try for more transparency

Nick Clegg last year. Photo: Matthew Sobocinski/USA Today via Reuters

Nick Clegg, Facebook's vice president of global affairs, tells me the company will try to provide more data to outside researchers to scrutinize the health of activity on Facebook and Instagram, following The Wall Street Journal's brutal look at internal documents.

Driving the news: Clegg didn't say that in his public response to the series. So I called him to push for what Facebook will actually do differently given the new dangers raised by The Journal.

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