RELEASE: COUNCIL UNANIMOUSLY APPROVES CAPPING RESTAURANT DELIVERY APP FEES

City Hall

LOS ANGELES - The City Council on Wednesday voted unanimously to instruct the City Attorney to draft an ordinance making it unlawful for third-party food delivery apps to charge more than 15%  in delivery fees and a 5% fee limit per order for all other types of charges during the COVID-19 public health emergency. The Council also instructed the City Attorney to include language specifying that 100% of tips will go to drivers. 

Councilmember O’Farrell, the author of the initiative, has heard from locally-owned business owners across the 13th Council District. The restaurant owners say delivery apps are charging as much as 30 percent in fees for services. 

“During the pandemic, it is estimated that up to 90 percent of restaurant sales are attributed to delivery orders,” said Councilmember O’Farrell. “Why should our local mom and pop restaurants --as well as their customers-- be put in a position to subsidize delivery app companies? This is about local interests over Wall Street interests. Only a level playing field will help our small businesses survive.”

The sunset date of the emergency ordinance is 90 days after the prohibition of on-premises dining has been lifted. 

The City’s Chief Legislative Analyst (CLA) and the Economic and Workforce Development Department will report on the effectiveness of the ordinance no later than 30 days after the prohibition of on-premises dining has been lifted. The Council also directed the CLA to report on further protections and effectiveness of the new law.

In recent weeks, Councilmember O’Farrell and his colleagues have taken the following actions to assist small business owners during the pandemic:

  • Councilmember Mitch O’Farrell allocated $1 million of the Council Office’s AB1290 Discretionary Funds to kickstart a grant program that will assist small businesses in the 13th District during and after the COVID-19 pandemic. More details on the application period will be announced soon.

  • Councilmember O’Farrell won the support of his colleagues to refine the Right-of-Recall Ordinance, which aims to ensure workers who are laid off due to the pandemic have the opportunity to regain their jobs once emergency orders are lifted. O’Farrell fought to  exclude restaurants, coffee shops, bars, nightclubs, and wine bars not located in a hotel or event space, as well as expand the job notification requirement to include email and text messages to notify former employees as to when work is available.

  • Introduced a resolution that supports federal legislation to fix the Paycheck Protection Program to assist our small business owners.

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