PHILADELPHIA (KYW Newsradio) — City Council members have voted unanimously to permanently cap fees on third-party delivery services for restaurants at 15%.
However, restaurants can choose to opt-out of those caps in exchange for more services.
Councilmember Cherelle Parker said with this legislation, restaurants are going to be guaranteed a 15% cap on food delivery services. That permanently extends legislation that was implemented at the start of the pandemic.
She said restaurant owners, who suddenly depended on third-party delivery services last year, said high fees for those services were simply unsustainable.
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"As the restaurants climb out of the pandemic, it is not as if they will be fully recovered on the day that the public health emergency ends," said Parker.
"It may take years for the restaurant industry, as well as the entire hospitality industry to recover from this pandemic."
But restaurants can opt out of those capped fees and pay more in exchange for marketing advantages, like having the business promoted on their platform.
"Other cities have already done legislation similar to what we voted on, with several of them implementing permanent fee caps," explained Parker.
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But she said they don't want to see business owners being forced into a higher tier of service.
"For the record, we're going to be watching the implementation of this new legislation like hawks," Parker said.
She pointed out that a clause that makes it illegal to make drivers pay for differences in revenue is included in the legislation.
"This is how they are earning income and revenue to keep their households going, but we won't let you gouge our restaurant industry or our people."
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She said she is aware that some of the third-party food delivery services sued the cities.
"These lawsuits, they are still playing out."
She expects the ability to opt into a more expensive tier of service will protect this legislation in Philadelphia.
Meanwhile, there is also a clause that makes it illegal to reduce the pay of the delivery drivers as a result of this legislation.
Restaurant advocates say the cost of delivery should be shouldered by the customer, not the restaurant or the driver.
