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Denver considers limits on third-party-delivery company fees to restaurants

A growing list of cities are capping fees on third-party delivery services and Denver may be next.

DENVER — Denver could join the growing list of cities that are capping fees on third-party delivery services, as a city councilwoman has submitted a proposal that could cut in half existing commissions paid by struggling restaurants to companies like GrubHub and DoorDash.

The uneasy relationship that has existed between locally owned eateries in particular and the tech companies that post their menus, pick up food from the restaurants and deliver it to customers has been exacerbated during the coronavirus pandemic. Restaurants need a delivery aspect to their offerings more than ever to meet customer demand but are leery of paying typical commissions of about 30% that turn the third-party delivery option into a money-loser for them in some cases.

RELATED: When you order food through delivery apps, restaurants pay

Cities from New York to Los Angeles to Evanston, Illinois have responded to the pleas of local restaurant industries over the past year by implementing some sort of cap in delivery fees. Many also have put rules into place to stop those same companies from reducing the pay of drivers, often hired as independent contractors, in order to offset that lost revenue.

Under a proposal from City Councilwoman Kendra Black, the city would cap commissions paid by the restaurants to these delivery platforms at 15%, bar the addition of new processing or service fees and ensure that driver pay can’t be decreased due to the caps.

Read the full article at Denver Business Journal

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