Los Angeles is pushing ahead with plans to restrict how a lot supply companies akin to Postmates, Grubhub and Uber Eats can cost eating places, capping supply charges at 15% of the acquisition value for orders in the course of the COVID-19 disaster.
The Metropolis Council voted 14-Zero Wednesday to ask metropolis attorneys to draft such a regulation, following different cities together with San Francisco and New York Metropolis. Eating places presently pay as a lot as 30% in charges to third-party supply apps, which Councilman Mitch O’Farrell denounced as exorbitant.
O’Farrell stated that, in the course of the pandemic, eating places have been relying way more closely on supply gross sales and had develop into “fully on the mercy of those third-party supply apps.”
“If we preserve taking place this highway, eating places might be compelled to lift their costs and threat shedding clients,” the councilman stated. “Why ought to eating places, and their clients, be put ready to subsidize supply app firms? We have to stage the taking part in area.”
The proposal handed Wednesday additionally would restrict different charges charged by the supply firms — these for companies aside from supply — to a most of 5% of the acquisition value of every order. And it could require that 100% of supply ideas from clients go to drivers. The restrictions would finish 90 days after L.A. lifts its ban on eating inside eating places.
In the course of the assembly, council members rejected a push by Councilman Bob Blumenfield to restrict which eating places have been lined by the price cap. Blumenfield, who argued that larger chains had sufficient leverage to barter for higher charges for themselves, stated the price limits ought to apply solely to eating places that had 5 or fewer areas.
O’Farrell countered that limiting the price restrictions to smaller companies may prod supply apps to drop…