Dive Brief:

• Some San Francisco restaurants have reported 30% commission fee charges on their DoorDash deliveries despite a citywide cap of 15% that was put into place in April, about a month after the COVID-19 crisis sparked nationwide shelter-in-place orders, according to the San Francisco Chronicle. 
• San Francisco chef Christian Ciscle called the company out for the practice on social media, and told the San Francisco Chronicle that such fees made it impossible to survive even before the novel coronavirus pandemic. 
• DoorDash told the publication that the issue has been corrected and affected fewer than 10 restaurant partners. The company will reimburse those partners. 

Dive Insight:

San Francisco was the first California city to pass this kind of legislation, which requires third-party delivery platforms to provide refunds to restaurants who inform them the policy has been violated and they have been overcharged. DoorDash told The Chronicle that the restaurants affected will be reimbursed, but Ciscle said he hasn't been notified about a reimbursement plan despite multiple calls to the company. 

This is not the only such violation as a number of cities, from Seattle and New York to Chicago, have put caps in place to help restaurants survive in an off-premise-only environment. Grubhub was found in violation of San Francisco’s 15% cap in June, raising rates after the initial order expired, but told SFGate that it was taking steps to implement the fee caps, which were extended until indoor dining resumes. Postmates didn’t initially comply with Washington, D.C.’s 15% cap put into place the same month. In that latter case, the Department of Consumer and Regulatory Affairs slapped fines on Postmates, which has since come into compliance, according to the Washington City Paper.  

Restaurant operators may have a bit more leverage than they did prior to the outbreak of the pandemic because more cities have added caps. And, as the crisis lingers, the conversation about caps isn’t going away. Portland, Oregon, approved  a 10% cap on delivery and 5% cap on pickup orders on Wednesday, for example. It will stay in place for 90 days after Oregon’s state of emergency order lifts.

The big question is if any of these caps will stay in place after the crisis ends. Commission fees are a complicated issue for restaurants, with some operators even defending the higher fees. One pizzeria owner told Oregon Live that she worries about the survival of her delivery partners amid these caps, saying, “For these businesses to continue to support our local brand, they must remain viable.” Delivery companies themselves have also pushed back, calling these caps an overstep and claiming they would lead to decreased order volume. 

A lawsuit was filed by customers against Grubhub, DoorDash, Uber Eats and Postmates in April over their “exorbitant fees.” This could have wide-reaching implications, including caps that linger after the pandemic ends. Indeed, some cities are pushing for permanent caps, but they won’t be met without challenges, compliance among them.