Under action taken Wednesday by the Los Angeles City Council and expected to be made official by the mayor, third-party food delivery services will not be able to charge restaurants more than 15% of the cost of an order, and that limit will remain in place for 90 days after the city allows on-site dining to resume.
"During the pandemic, it is estimated that up to 90% of restaurant sales are attributed to delivery orders," said Councilman Mitch O'Farrell, who authored the motion. "Why should our local mom-and-pop restaurants, as well as their customers, be put in a position to subsidize delivery app companies? This is about local interests over Wall Street interests. Only a level playing field will help our small businesses survive."
The council also voted to limit third-party food delivery companies from charging restaurants more than 5% to use their services or to pay commissions.
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The Los Angeles Chief Legislative Analyst and the Economic and Workforce Development Department will report on the effectiveness of the ordinance no later than 30 days after the prohibition of on-premises dining has been lifted.
The council also directed the CLA to report on further protections and effectiveness of the new law, according to O'Farrell's ordinance, which must be signed by Mayor Eric Garcetti to take effect.
Garcetti on Friday said Los Angeles restaurants can reopen at 60% of their capacity and apply for outdoor dining permits, under social distancing guidelines put in place due to the COVID-19 pandemic. The details of the outdoor dining program are being finalized.