Business & Real Estate

Restaurants see extra charges from delivery services despite county fee cap

Overcharge
Olivia Treynor/Town Crier
Several Los Altos restaurants have reported seeing charges from third-party delivery services higher than the limit set recently in an ordinance passed by the Santa Clara County Board of Supervisors.

Some third-party delivery services have been slow to follow a recent ordinance passed in Santa Clara County that caps fees charged to restaurants during the COVID-19 pandemic.

Several Los Altos restaurants reported seeing charges higher than the limit set in an ordinance passed by the Santa Clara County Board of Supervisors effective Dec. 19, which caps delivery service fees charged to restaurants at no more than 15% of the order. Screenshots of online receipts shared with the Town Crier last week by multiple restaurants show that DoorDash and Postmates were charging more than 15% commission on orders, in some cases up to 28%. Multiple restaurant owners said Uber Eats, after initially overcharging, had pledged to refund restaurants at the next pay period.

A DoorDash spokesperson told the Town Crier that the ordinance allows for delivery services to charge for optional promotional services at negotiated prices. As of Monday, Kim Mosley, president of the Los Altos Chamber of Commerce, said at least one restaurant was not told of the optional charge in advance, but had spoken to DoorDash, which agreed to remove them from the service and look into reimbursement. Neither Postmates nor Uber Eats responded to an inquiry prior to the Town Crier’s print deadline. Last week, the chamber met with county counsel to discuss the issue, and Mosley said the county pledged to do what it could to tighten the ordinance.

“I would like to ask our residents to call our restaurants directly for curbside pickup to avoid these fees altogether,” Mosley said via text. “Commission charges of up to 30% leave our restaurants without profit in a time when they desperately need it.”

Restaurants are currently allowed to open only for takeout and delivery due to the shelter-in-place restrictions.

“Many of these businesses rely on third-party delivery vendors such as DoorDash, Uber Eats and Grubhub to meet their business’s delivery needs,” County Supervisor Joe Simitian said in a press release announcing the cap on fees last month. “While delivery vendors provide an important service, and are certainly within their rights to charge for such services, the current pandemic unfortunately creates opportunity for price gouging. That’s the problem we’re tackling.”

Jennifer Verner, business operations manager at Opa!, which has multiple locations in the county in addition to Los Altos, said last week that she was seeing the problem at her restaurants countywide. She said the chain is struggling to break even – opening just to serve customers and keep staff employed – and had to undergo layoffs right before Christmas.

“It’s eating into any profit margin we have left,” Verner said of the over-charging.

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