Advocating for Third Party Delivery Fee Caps

By Oregon Restaurant and Lodging Association.

ORLA has been participating in the drafting and adoption of a permanent third-party delivery fee cap for the City of Portland along with other stakeholders and the Mayor’s office in a transparent collaboration with input from all sides. See the latest draft here.
During the pandemic, the city of Portland adopted a temporary 10% cap on third-party delivery fees to help restaurants. This past June, ORLA was instrumental in securing an extension of the cap another eight months. Now, the city is looking to adopt a permanent cap of 15% along with protections for restaurants. The ordinance is consistent with similar approaches taken in recent months by Seattle and San Francisco and its provisions offer strong protections and support to restaurants and food carts.  
This approach also reduces the likelihood of continued consumer-facing fees or constrained delivery radiuses that may negatively impact restaurant sales. Additionally, this policy will require food service platforms to provide a reasonable level of service at or below a 15% commission rate in the City. It also seeks to protect restaurants from being penalized or otherwise disadvantaged from opting into the 15% capped rate. The cap on takeout commissions will be 4% under this policy.    
Other notable protections and operational standards that support local restaurants and food carts include:

  • Requires food delivery platform to notify all currently contracted restaurants in writing that they have an option to select the 15% or lower capped fee once this policy is adopted. This notification must be available in multiple languages reflective of the Portland community.
  • The included language requires platforms to clearly define and explain all fees and commissions associated with contracted services, including the transaction fees that may be passed on from payment processors to restaurants by platforms. Transaction fees may not be more than the platforms themselves are charged by payment processors, and this rate must be able to be clearly communicated in restaurant contracts and substantiated upon request.
  • Third party food platforms shall not disclose any info about a restaurant, including its menu or contact information, without the restaurant’s consent.
  • Delivery platforms shall not restrict the prices that a restaurant may charge for food and/or beverages.
  • There is a strong enforcement mechanism in this ordinance including fines for non-compliance. Current complaints may be filed here, and similar recourse will be available in the future following the adoption of this ordinance.

ORLA is pleased to have been instrumental in the creation of this new policy to protect restaurants and consumers.

Next Steps: The final ordinance language will be filed with the Council Clerk. This item has been scheduled for a first reading as a time-certain item at the Portland City Council meeting on 10:40am on Wednesday, December 7. Following the first reading, it would move to a second reading and vote for adoption on Wednesday, December 14.

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