Portland Restaurant Owners Say Delivery Apps Are Ignoring the City's Fee Cap
Portland, Oregon placed a temporary limit on delivery fees at 10 percent, but local businesses say the big apps are still charging much more.
In early July, the Portland (Ore.) City Council became the latest city to vote in favor of putting a temporary cap on the fees that delivery apps like DoorDash, Grubhub, and UberEats can charge restaurants. According to the ordinance, those commission fees—which had previously been as high as 20 to 30 percent of the total cost of the order—could not exceed 5 percent of the total cost if the order was placed through the app but their drivers didn't deliver the food, or 10 percent if the food was both ordered and delivered through the app.
According to KATU, the 5- to 10-percent cap on commission fees would be in effect as long as Oregon remained under a pandemic-related state of emergency, and it would extend for another 90 days after the state of emergency ended. If the apps ignore the ordinance and exceed the fee cap, they could be fined up to $500 per violation.
But more than two dozen local restaurant owners have already reported that some of those apps, including Grubhub and Postmates, have either shrugged the ordinance off entirely or have found shady ways to evade the commission cap.
Last week, Han Ly Hwang, the owner of the Kim Jong Grillin' and Demarco's Sandwiches food carts, told OregonLive that his Postmates representative texted him and essentially said 'Sorry, not sorry, we're not playing along.' The text said that "at this time we are not following the 10 [percent] cap," but assured Hwang that "if anything changes" his account would automatically be updated.
He was also zero percent surprised to learn that the apps were pushing back. "After dealing with these guys after the past six years, I was really skeptical,” Hwang told the outlet. “I didn’t expect much to happen."
Hwang's experience is not unique. The Portland Independent Restaurant Alliance told PDX Monthly that it has already been contacted by between 20 and 30 restaurants who say that Grubhub and Postmates were both continuing to charge commission fees of between 20 and 30 percent. It has also called for restaurants to boycott Grubhub until they start abiding by the 10-percent commission cap.
When Katy Connors, an organizer who works with PIRA contacted Grubhub about their ordinance violations, a spokesperson told her that the additional charges were "marketing fees," not delivery fees, and weren't restricted by the commission cap. "Unlike our competitors, who are focused on providing restaurants with delivery services, Grubhub is primarily a marketing engine for our independent restaurant partners,” Grubhub's senior director of public affairs Amy Healy wrote, according to Eater. (PIRA says that it doesn't matter what they call the fee, they should still be capped at 10 percent of the order total.)
And although PIRA specified that UberEats and DoorDash were among the apps that were complying with the new regs, they're apparently being lowkey shady too. UberEats has since added a $3 "City of Portland Ordinance" charge to every order, saying that it's necessary so they can continue to pay their drivers. DoorDash has also added a $2 "Portland City Mandate" fee for its own customers.
It's super easy to grab your phone and place a delivery order without getting off the couch (or putting real pants on), but since restaurants are working on the thinnest of already-thin margins right now, it might be worth leaving the house and grabbing that to-go order yourself.