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With many restaurants relying on third-party delivery services to get their orders to customers during the pandemic, aldermen have placed a cap for now on how much those companies can charge.
At the April 27 City Council meeting, Council members placed a 15% cap on the fees that third-party delivery platforms could charge restaurants, planning to review the action June 1 if an alderman in discussion with the companies comes back with a greater accepted proposal.
Governor J.B. Pritzker issued an executive order March 20 mandating that residents shelter-at-home and requiring all non-essential businesses, including restaurants, to cease operations and rely on delivery, drive-through and takeout options to continue service, City staff noted in a memo.
“Many consumers use third-party delivery platforms to order food from Evanston restaurants,” staff noted. “Some of these third-party delivery platforms have waived fees on the consumer side but continue to charge fees to restaurants. These fees can represent a significant portion of the restaurants’ revenues and can potentially erase any profit realized by the restaurant.”
In discussion at the April 27 meeting, aldermen supported placing the cap on third-party delivery fees, while Alderman Thomas Suffredin, 6th Ward, continues talks with some of the companies to see if an agreement can be reached on an equitable fee.
“I don’t like the idea of the government setting prices for things like this,” said Alderman Donald Wilson, 4th Ward, at the meeting. “But at the same time, I’m viewing this not just as a cost issue, but it’s more of a consumer information kind of an issue. If, for example, you look at a website of one of the vendors, one of the delivery companies, it says ‘Help your local restaurants and you get your first delivery for free,’ but … you know restaurants are paying those additional charges.”
Ald. Suffredin, who has been in talks with some of the companies, said he would prefer not having to regulate, too. “But since we’re in a situation where restaurants are on the edge of surviving, I feel like we have an obligation to businesses here to try and protect them and keep them going. But having said that, if I can continue discussions with them and find something better to bring back in two weeks, I will do that.”
A flat rate works better for some companies than others, he noted. “I was told there are companies that are already below 15%; some may be higher and some provide different levels of service. Obviously, in normal times the tradeoff that a restaurant makes is you have a much greater reach than you would otherwise. But we’re not in normal times right now … and if we can come up with something better in two weeks we can go with that.”