PORTLAND, Ore — Delivery and take-out options are the only way most Portland restaurants are surviving the COVID-19 pandemic and ensuing shutdown to in-person dining. However, third-party apps like GrubHub, UberEats and Caviar, to name just a handful, have cashed in on the increase in food deliveries across the country.
Those third-party apps were charging Portland restaurants as much as 30% or more of each item ordered, but that's come to an end. On Wednesday, the Portland City Council unanimously passed an emergency ordinance to cap the fee third-party apps can charge at 10%.
That is welcome relief for many small restaurants, like Pure Spice in the Jade District.
"If the delivery company takes about 30 to 35-percent then it takes all our profit, so we can not earn any money to pay the rent and employees, it’s really challenging for us," said owner Qing Tan.
According to the ordinance, many restaurants were unable to negotiate those fees down from 30% and didn't want to be taken off those apps for delivery, because it was the only way they could stay in business.
The ordinance was introduced by Commissioner Chloe Eudaly. Many local restaurants banded together in support of the measure, which was heralded by the Portland Independent Restaurant Alliance.
Delivery service app companies don't like it one bit. Toney Anaya,Head of Government Relations at DoorDash wrote in part: "We’re disappointed that, in the midst of this crisis and when food delivery is more essential than ever, Portland's City Council has passed a dramatic and arbitrary cap that will have the unintended consequence of reducing sales for local restaurants and earning opportunities for delivery workers."
Cities across the country have imposed similar caps, including New York, Seattle and Los Angeles (all of whom capped it at 15%).
Proponents of the cap lobbied for it. At Wednesday's hearing, Katy Connors spoke for the Portland Independent Restaurant Alliance, saying, "Without the cap on these commission fees, the greed of put of town corporations will forever damage the vitality of Portland’s independent businesses."
The ordinance takes effect immediately and lasts through the city's designated State of Emergency, as well as the following 90 days. Companies face a $500 fine for every violation.