Salisbury City Council members are considering a plan that would cap fees paid to food delivery companies such as UberEats, Door Dash, Grub Hub and Postmates a way to help restaurants struggling during the Covid-19 pandemic.
Many local restaurants agreed to pay the commissions – which range from 30 percent to 35 percent of each sale – but that was before the pandemic and the eateries were operating at full indoor capacity.
The fees charged by the delivery services are paid by the restaurants, not by customers.
“With the pandemic, most of these restaurants have had to pivot to these delivery services just to survive,” Laura Soper, the city’s Director of Business Development, said during a council work session on Monday.
Many restaurants now operate at a loss or barely break even on a majority of their sales, she said.
Soper proposed legislation, modeled after a measure in Baltimore, that caps commission fees at 15 percent, while protecting delivery driver pay and allowing restaurants to opt in to paying more if they choose.
Other municipalities and counties around the country have enacted commission caps since the Covid-19 outbreak, with caps ranging from 10 percent to 20 percent to last through the public health emergency, she said.
Most local restaurant owners are generally supportive of these commission fee cap measures.
“The fees are astronomical, but many restaurants have cited that third party delivery systems do drive a fair amount of business and helps them rotate the stock,” she said in a memo to council members. “For that reason, most are in the position whereby they would not want to opt out of third party delivery completely. “
Soper said she asked all of the delivery companies if they would voluntarily cap their commission fees, but all of them declined.
Councilwoman Michelle Gregory said she would prefer a permanent cap placed on delivery services, not just during a pandemic, while Councilman Muir Boda asked if it would apply to restaurants outside Salisbury that deliver within city limits.
Council President Jack Heath said he has reservations about the proposed cap on the fees, and wondered if it could have “unintended consequences.” He asked Soper if local restaurant owners could attend a future work session to weigh in on the proposal.
Heath also noted that two council members – April Jackson and Angela Blake -- were absent from Monday’s meeting, and he wanted their input as well.