Although it has been weeks since Portland City Council approved the new ordinance on capping fees on food delivery apps at 10 percent, Grubhub and Postmates are reportedly defying the rules, even taking as much as 30% of fees from local restaurants.
Prior to the approval of the new ordinance in Portland, apps like Grubhub, Caviar, and Postmates were charging restaurants 30 percent, sometimes more, for every delivery order. For small business owners listed in these delivery apps, it is tough, especially with the COVID-19 restrictions. In the second week of July, Portland finally made it illegal for delivery services to charge more than 10 percent in fees. Additionally, third-party delivery services are banned from taking those lost funds out of the delivery drivers’ salaries.
Unfortunately, Postmates and Grubhub are found to be taking advantage of the situation. The said delivery apps are reportedly still taking 30 percent of fees from various restaurants.
For an organizer working in the Portland Independent Restaurant Alliance (PIRA), Katy Connors, it looks like this situation is a chance for the apps to take more fees, considering “they know that cities and city councils don’t have the resources nor the ability to really understand what it means to enforce this.” One of these issues that city officials are currently facing is the presence of federal agents in the city who won’t leave until the federal courthouse – which has been numerously attacked by rioters – is secure.
In correspondence with Connors, Amy Healy, senior director of public affairs at Grubhub, claims that the said additional costs were marketing fees, not delivery fees, an irrelevant distinction, according to Connors, considering the new law says apps can’t take more than 10% of fees in any form.
Last week, Grubhub was criticized for listing restaurants without authorization, another issue that Grubhub does not seem to deny as they have considered this move a trend “that other food delivery companies have been doing for years as a way to widen their restaurant supply.”