San Francisco Mayor Caps Fees Food Delivery Services Can Charge Restaurants

SAN FRANCISCO (KPIX) -- In order to support struggling San Francisco restaurants offering take-out food during the shelter order, Mayor London Breed on Friday issued an emergency order temporarily placing a cap on delivery fees from third-party delivery companies.

Even before the pandemic, the Golden Gate Restaurant Association fought to reduce those commission fees which, typically, range from 20 to 30% per order. Now, this fee can wipe out a restaurant's entire profit margin.

"We're seeing about a 10% increase in orders week over week in people that are open. So the volume is going up. The problem is the restaurants are losing money on those sales," said GGRA executive director Laurie Thomas.

As delivery service is the only option for customers other than take-out, the order limits the fee app-based delivery companies can charge restaurants to 15 percent, according to the mayor's office.

"What this will do is make sure that our restaurants are protected because we know during this pandemic which we are not certain as to how long it will last," said Mayor Breed. "There are going to be a lot of restaurants who may not come back from this."

Since the pandemic, many delivery services have waived fees on the customer side but they still charge restaurants a commission.

"I feel that the fees were astronomical and, in my perspective, they were a non-starter," said Che Fico co-owner David Nayfeld.

Nayfeld said he did not incorporate delivery apps into his business because of those high fees.

"I don't think any restaurants are breaking even right now, I don't think any of them are even coming close to breaking even," he said. "If anything what they're doing is they're slowing the bleeding slightly."

Delivery service GrubHub e-mailed its customers asking customers to oppose the mayor's order, saying it would increase the customers' fees by $5 to $10 per order and cripple delivery orders.

The city says the cap will stay in effect until restaurants can resume in-person dining.

"Everyone I've talked to is very encouraged by it, on the restaurant side for sure," said Thomas.

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