The Takeaway

Portland Restaurants Want to Cut the High Fees Charged by Delivery Apps

The Portland City Council has unanimously granted their request for temporary relief.

By Julia Silverman July 7, 2020

Faced with the strong possibility that indoor dining will be scaled back as coronavirus infection rates continue their precipitous climb around Oregon, restaurants in Portland launched a frantic campaign to reduce the fees paid out to third-party delivery services like DoorDash and Uber Eats. 

On Wednesday morning, they notched a win when members of the Portland City Council unanimously approved a cap on delivery fees at 10 percent. Backers say that is the nation's lowest fee cap — other cities, including Seattle, San Francisco, and the District of Columbia, have approved caps of 15 percent. 

The new law will remain in effect throughout Gov. Kate Brown's declared state of emergency, and then for three months after it is lifted.  Companies that violate the ordinance are subject to a $500 penalty, and may not reduce compensation of delivery persons as a way to offset the cut in fees.

The request faced strong opposition from the app-based delivery companies, who have been fighting such campaigns nationwide. 

We are very concerned that the policy being considered in Portland fundamentally threatens these very restaurants that we all aim to support,” wrote Caleb Weaver, Uber’s Director of Public Affairs, in a letter to Marshall Runkel, Commissioner Chloe Eudaly’s chief of staff. “A cap would ultimately increase costs for food delivery, resulting in less volume and revenue for restaurants and fewer earning opportunities for area workers. 

The debate comes as restaurants may be forced to rely even more heavily on the take-out model for the foreseeable future. Though restaurants and bars throughout Oregon were allowed to open for indoor dining with physical spacing and mask requirements in counties that were approved to move into “phase one” of reopening as outlined by Gov. Kate Brown, states around the country have been closing down indoor dining as coronavirus case numbers rise. Now Brown is coming under pressure from influential voices to follow suit. 

“I feel a bit like I am, like we are, watching this slow-moving train wreck happen,” says Multnomah County Commissioner Sharon Meieran, whose previous early calls for requiring masks indoors statewide and testing all residents and staff of nursing homes for coronavirus regardless of symptoms were ultimately heeded by the governor. “Watching the surge in cases made it feel urgent to me that we take meaningful action beyond asking or cajoling or hoping for the best, in terms of closure of the places where we know there is a high potential of transmission of COVID.” 

Katy Connors, the head of operations for Hat Yai in Portland, who has been organizing around the issue for the Portland Independent Restaurant Association, says restaurants understand the risks of remaining open as case numbers continue to climb and are bracing for closure, but the second-wave loss of in-person dining, after being shut down all spring, lends new urgency to the movement for delivery fee reform.

The issue is particularly acute for smaller, mom-and-pop restaurants without huge Instagram followings or pricy dishes. While high-profile restaurants can negotiate with delivery apps for lower fees; smaller operations, often those owned by Black, Indigenous, Asian, Latinx or other persons of color, typically can’t command that same privilege, says Jenny Lee, the advocacy director for the Asian Pacific American Network of Oregon.

As a result, such restaurants often wind up paying up to 30 percent of the price of every menu item that is delivered by third-party companies.  

Particularly since the pandemic hit in March, restaurants have been trying to encourage customers to order from them directly via phone, instead of going through third-party delivery services. But in our on-demand culture, consumers have been conditioned to tap an app on their phone and scroll through hundreds of options for food delivery at once; restaurants that cut out those platforms entirely risk dropping off the collective radar completely.  

“Having to bargain for yourself can be really challenging when you are dealing with a dominant culture,” Lee says. “The treatment is inequitable depending on who the owner is.” 

The restaurant industry overall has been among the hardest-hit from the pandemic; about 40 percent of those who work in accommodations/food services have filed for unemployment benefits in the last three months, according to the state employment department. Meanwhile, the delivery food service apps have been enjoying enormous growth; this weekend, Uber Eats announced that it was spending $2.65 billion to acquire rival Postmates. 

Charles Boyle, a spokesperson for Brown, says that "social gatherings" (like eating a meal inside at a restaurant) are one of a number of significant drivers behind recent increases in coronavirus cases.

"If COVID-19 metrics across the state continue to worsen, all options are on the table," Boyle says. 

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