Chicago Might Cap Grubhub and DoorDash’s Delivery Restaurant Fees

4 weeks ago
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Chicago’s City Council will once again pursue a fee cap for third-party delivery companies, hoping to aid restaurants that are ailing during the novel coronavirus pandemic. Ald. (44th Ward) Tom Tunney said Thursday that he hopes the council could adopt an ordinance this month to help restaurants before typically frigid months in January and February arrive. That’s when restaurants sales are usually slow. The winter will be especially harmful after the devastation administered by the pandemic this year.

In May, the council introduced an ordinance that would have applied a 5-percent cap on fees charged by companies like DoorDash, Grubhub, and Uber Eats. Despite the support of angry restaurant owners who complained of unethical business practices from those ‘ companies, the measure never made it out of the council’s committee. Those third parties can charge restaurants fees of around 20 percent per order and as COVID-19 keeps customers away from dining rooms, those fees have more impact on restaurants trying to survive. Tunney, a former chairman of the Illinois Restaurant Association and former owner of Lakeview cinnamon roll institution Ann Sather told reporters at a Thursday afternoon media briefing that about half of restaurant owners come via third parties during the winter months.

Since Gov. J.B. Pritzker banned indoor dining last month, many restaurant owners have again asked the council to pursue a fee cap. More and more customers will be using third parties this winter and during the ban. During Thursday’s briefing, Mayor Lori Lightfoot wouldn’t say if she supported a 5-percent cap as introduced to the council in May. That would be the most restrictive cap in the country; San Francisco’s cap sits at 15 percent, and New York’s is at 20 percent. Lightfoot said she “didn’t want to speculate or negotiate in public.”

City officials called for a temporary cap, even though restaurant owners have told Eater Chicago they’d prefer a permanent limit. A temporary action would be considered an emergency order during the pandemic making the city a smaller target for a legal challenge by a third party which felt the council was overstepping its authority.

Lightfoot on Thursday also announced a new campaign aimed at encouraging carryout and delivery orders. It’s called Takeout Chicago — Lightfoot suggested using the #TakeoutChicago hashtag on Twitter to encourage people to post photos of their meals to spread awareness.

The city’s tourism arm, Choose Chicago, is handling the effort. As outdoor dining is volatile in a cold weather city like Chicago, this campaign has a chance to do more of restaurants away from Fulton Market and West Loop, were the city helped arrange the deployment of plastic igloos for outdoor dining.

Takeout Chicago participants can email TakeOutChicago@choosechicago.com with their name and a list of 10 different restaurants where they’ve placed orders. They’ll then be entered into a contest for a chance to win 90- to 120-minute VIP tour of places like Soldier Field, the Art Institute of Chicago, and DuSable Museum of African American History. Entries must be received by December 15. There will be up to 10 winners.

Lightfoot was asked about how the contest only awards people with the money to spend on meals. Money is tight for many during the pandemic.

“The point of this is the try to encourage those who can to support our local businesses,” the mayor said. “Not everybody is going to be in the same situation and we obviously recognize that.”

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