Proposal to cap delivery app fees in Chicago clears City Council hurdle

Gregory Pratt, Chicago Tribune
·2 min read

A plan to cap delivery fees charged to Chicago restaurants by third-party delivery companies such as Grubhub and Uber Eats at 10% of the order’s cost as long as indoor dining capacity is set at below 40% during the coronavirus pandemic moved closer to final passage on Tuesday as aldermen voted to advance the plan.

The proposal, introduced to the City Council on Monday as Mayor Lori Lightfoot and aldermen try to help restaurants make it through the winter, passed in the joint committee on finance and license and consumer protection.

The proposed fee limit is less strict than the 5% ceiling in an ordinance an alderman introduced months ago, which Lightfoot rejected in favor of a rule requiring the services to disclose all the fees they charge.

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The package approved by the committee also sets a 15% limit on other fees charged by the apps, mainly for marketing restaurants on their websites.

Although some restaurateurs have hailed the measures, tech companies have criticized the new rules, which they said could make it harder on restaurants by leading to a decrease in orders, among other claims.

When Gov. J.B. Pritzker earlier this month again banned indoor dining because of spiking COVID-19 cases, Lightfoot announced she would seek a temporary cap on the fees.

The ordinance, introduced by Finance Committee Chairman Ald. Scott Waguespack, 32nd, and Aviation Committee Chairman Ald. Matt O’Shea, 19th, would go into effect immediately upon passage if two-thirds of aldermen voted for it.

Otherwise, it would go effect 10 days after passage and publication.

A DoorDash spokeswoman said the proposal would have unintended consequences.

“This legislation could cause us to increase costs for customers, which could lead to fewer orders for local restaurants and fewer earning opportunities for Dashers," the spokeswoman said in statement. "It also removes options available to restaurants by limiting their ability to opt-in to additional services to help their business.”

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