Here’s some genuine relief for Seattle restaurant owners: The latest wave of coronavirus pandemic assistance doesn’t require filling out vague forms or listening to hours of elevator music while on hold.
On Friday, mayor Jenny Durkan and company announced an emergency order capping third-party, app-based delivery platforms’ commission fees at 15 percent until unrestricted in-house dining returns. The policy helps resolve a conundrum roiling Seattle restaurant supporters’ stomachs since the coronavirus pandemic began: While the state’s social distancing guidelines mandate that we stay at home, many restaurants’ delivery operations have leaned on third-party services, such as Uber Eats, DoorDash, and Grubhub, that charge steep commission fees. In other words, customer dollars weren’t supporting local establishments as much as some diners may have assumed. “Unfortunately, some third-party delivery services are charging exorbitant commission fees, which exacerbates the financial hardship many restaurants are already experiencing,” Durkan said in a press release.
Terra Plata’s Linda Di Lello Morton, the president of the Seattle Restaurant Alliance, elaborated on those struggles. Restaurants operate on thin margins—an average of 4 percent—and third-party delivery companies’ fees can run as high as 30 percent, slicing chunks out of crumbling revenue pies. “This relief measure is one of many that are needed to help our restaurants survive so we can return employees to work and resume serving our community when restrictions are lifted.”
The news comes after San Francisco introduced a 15 percent cap of its own and some apps, including DoorDash, have taken measures to reduce charges during the crisis. That doesn’t mean they support policies like the one Seattle has now adopted. “We believe that doing our part is critical during this unprecedented time and that government-imposed, one-size-fits-all solutions do not reflect the needs of the businesses they are intended to help,” notes a DoorDash blog post from early April that announced 50 percent commission fee cuts. “Arbitrary caps can cut off a lifeline for many consumers and deprive Dashers and Couriers of the earnings they need, now more than ever.”
Delivery drivers do get protections under the Seattle order. The policy requires that drivers receive 100 percent of tips, and it’s illegal for third-party delivery companies to reduce driver pay rates in response to the new rules.
Restaurants that may not have considered the apps during this difficult time may have new reason to explore their options too. Marination and Super Six had been handling delivery in-house during the crisis due to the high third-party fees, according to co-owner Kamala Saxton. Now? “This commission cap will allow us to transition to a third-party delivery service without facing further financial stressors.”
Now that sounds like a true relief.