Cambridge City
MA

Policy Order
POR 2020 #88
Order Adopted
Apr 27, 2020 5:30 PM

That the City Manager is requested to work with relevant departments to restrict third party delivery services fees to restaurants and disclose to customers of how delivery charges are allocated.

Information

Department:City Clerk's OfficeSponsors:Councillor Patricia Nolan, Vice Mayor Alanna Mallon, Councillor Marc C. McGovern, Mayor Sumbul Siddiqui
Category:Policy Order

Attachments

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Body

WHEREAS:

The City of Cambridge has long been dedicated to supporting locally owned or operated businesses and the character and diversity they bring to our city; and

 

 

WHEREAS:

The Governor’s “Stay at Home Advisory” on March 23rd declared that all restaurants may only be open for takeout and delivery in an effort to stop the spread of COVID-19; and

 

 

WHEREAS:

Restricting restaurants to takeout and delivery has placed a sudden and severe financial strain on small businesses that already operate on thin margins under normal circumstances; and

 

 

WHEREAS:

Third party delivery services, with which local restaurants have very little bargaining power, charge restaurants commission fees of up to 30% of the revenue from any order placed on their application or website; and

 

 

WHEREAS:

Restaurants already struggling have experienced an increase in orders through delivery apps from a low percent of total sales (5%-20%) to as much as 80% of total sales, which leads to an inability to cover costs and multi-billion companies getting excess fees from small local businesses; and

 

 

WHEREAS:

Some recent promotions put on by third party delivery services lack transparency; including some advertised as supporting local business during the COVID-19 crisis, which are deceptive since the promotions do not lower the fees charged to the restaurant; and

 

 

WHEREAS:

San Francisco’s supplemental COVID-19 emergency declaration capped fees for delivery apps to 15% and New York City lawmakers are proposing a cap of 10%; and

 

 

WHEREAS:

If immediate action is not taken, the City of Cambridge is in danger of losing the diverse range of its local restaurants to the COVID-19 crisis; now therefore be it

 

 

ORDERED:

That the City Manager is requested to work with relevant departments to determine the feasibility of restricting third party delivery services from charging restaurants a fee per online order for use of its services that totals more than 10% of the purchase price of such online order; and further be it

 

 

ORDERED:

That all delivery services be required to disclose how the dollars for each purchase is allocated, to ensure that consumers know where their money is going; and further be it

 

 

ORDERED:

That any restriction would last at least through the duration of the “Stay at Home Advisory,” until restaurants are allowed to serve customers dining in their establishment at full capacity, at which point the cap of 10% will be reassessed.

 

Meeting History

Apr 27, 2020 5:30 PM Video City Council Regular Meeting
draft Draft
RESULT:ORDER ADOPTED [UNANIMOUS]
YEAS:Dennis J. Carlone, Patricia Nolan, Jivan Sobrinho-Wheeler, Alanna Mallon, Marc C. McGovern, Sumbul Siddiqui, E. Denise Simmons, Timothy J. Toomey, Quinton Zondervan