On Thursday, May 7, 2020, Melissa Pedigo accepted an order from GrubHub from Casablanca in Ypsilanti. MLive.com
Ann Arbor, Michigan-The emergency cap on food delivery fees charged by third-party services to local restaurants is currently awaiting final approval by the Ann Arbor City Council.
The council voted unanimously in its first reading on Monday night, May 3, to protect restaurants from what the council members call “high fees”.
The main sponsor of the proposal, D-3rd Ward City Councillor Julie Grand (Julie Grand), said that instead of taking emergency measures as previously planned after the first vote on Monday, it was the city prosecutor. The office recommends that the city council conduct normal legal procedures through two interpretations.
The provisional regulations will restrict services such as Uber Eats, DoorDash, GrubHub, and Postmates from charging restaurants a commission or delivery fee that is 15% higher than the price of a customer’s food order, unless the restaurant agrees to charge a higher fee in exchange for such things as advertising, marketing or visiting customers Subscription program.
When the state finally lifts the COVID-19 restrictions on restaurants, it will be sunset time, which currently includes a 50% indoor seating capacity limit, social distancing requirements, and a requirement to close indoor dining areas before 11pm
DoorDash sent an email to board members before voting on Monday, requesting amendments to the decree to exclude DoorDash from the proposed fee cap.
Chad Horrell of DoorDash Government Relations wrote: “Although many places have passed caps to reduce the burden on local restaurants, they have not considered the negative impact of caps.”
He said that because the cost of this service cannot be covered by the upper limit, customers must bear more expenses. As a result, the transaction volume of the entire market below the upper limit is reduced. This is most likely due to the fact that customers are unwilling to pay more Due to expenses.
Horrell writes: “The reduction in volume means the loss of revenue for restaurants, and the revenue opportunities for meal delivery drivers or “Dashers” are reduced, and business tax revenue is lost.”
Horrell said that last week, DoorDash introduced a new pricing model that provides local restaurants with a 15% commission option. He said that those who see the benefits of increased marketing opportunities and other services still have the opportunity to choose a plan with higher fees.
Horrell asked the council to amend the law to stipulate that the 15% fee cap does not apply to third-party food delivery services that provide 15% of the option to restaurants in less than 10 locations in the United States.
Grande thanked the city’s assistant attorneys Betsy Blake and John Reiser for their work on the law.
Grande said: “It started with an email I received from Phil Clark, manager of Red Hots, a restaurant in District 3, and he did propose The damaging nature of these third-party delivery fees,” Grande said.
Grande said that she listened to Clark, did some research, and found that many communities had proposed fee caps and handed them over to the city’s attorney’s office.
Reiser came into contact with many different businesses in the community, and not only got confirmation that most of them wanted to get the fee cap, but also found the second problem, that is, the third-party delivery service is publishing old menus and causing promises Many questions. Grande said the problem with local restaurants.
The proposed regulations will make it illegal for third-party delivery services to publish inaccurate or misleading information about the Ann Arbor restaurant or its menu.
Ali Ramlawi, a council member of the D-5th Ward, owner of the Jerusalem Garden Restaurant, said that protecting the accuracy of the menu is the most important part of the decree.
He said that the menus were taken “without our knowledge” and used on third-party platforms. These menus can cause problems and cause confusion and anxiety for customers.
Ramlawi said, but in terms of costs, it is not easy for local governments to set an upper limit. He said that arrangements with third-party delivery services are voluntary, not mandatory, and restaurants do not have to engage in third-party services because they feel that it is economically disadvantageous for them.
He said: “This will lead to a second reading, which gives us more time to think about things.” “But we are getting closer and closer to the expiration date of these urgent orders, unless something unexpected happens to change the situation.”
Travis Radina, the third-term district governor of the Security Council, said there has been discussion about Ramlawi’s proposal to make certain parts of the decree permanent.
He said that according to the advice of legal counsel, this is a temporary interim decree, but the city may be able to use it as a first step to understand how it works and its impact on the market and then seek long-term solutions.
He said: “I think this is an important step towards taking action to protect the industry from these high costs.”
Officials said that because of the operating restrictions imposed by the state, the Ann Arbor restaurant, which is already struggling, charged more than 30% of the delivery fee.
He said: “I hate to see many of our local businesses suffer from these service companies entering and making huge profits, increasing customer costs.” “Frankly speaking, many times people don’t know that when they tip, they don’t have any tips. Give it back to the restaurant staff, and the delivery service staff will keep it.”
Ratina urges residents to place orders directly at local restaurants or pick up orders, which is the best way to support the local industry.
Ramlawi detailed his concerns about third-party delivery services, saying that they can advertise restaurant menus and products without the restaurant’s consent, and they have done so many times.
“How can someone take a leading position in your business and spend a fee on it? It seems that I am more interested in monitoring and then setting a fee cap,” Council D-1st Ward member Jeff Heiner (Jeff Heiner) Hayner) said.
Ramlawi said: “This is really my focus.” He explained that the third-party service advertises the restaurant’s menu as a “trailer” to show the many businesses they can bring to the restaurant.
He said: “Then they pulled the plug and said:’If you want us to bring you this business, please sign this contract.’ But they first have a trial period and you can start getting orders.” “And You’re like, “Oh, I didn’t work for this, I don’t know what happened.” Many times, the same customer receives two orders because the driver places the order, and then the customer calls and places the order. Then, you just Because no one wants to pay for the second order and is dragged into the bag, this is a big problem for our industry.”
City Council Member D-1st Ward Lisa Disch asked the city lawyer whether the city government could regulate the ability of third-party services to provide restaurant menus without consent.
Black said the city has the ability to regulate false and misleading statements, and can do so outside of emergency powers.
“And I would add that the restaurant has filed a lawsuit against these third-party delivery systems, and these third-party delivery systems are currently under trial in federal court,” Reiser said. “Therefore, we do need more time to understand the content of the controversy, or to study individual lawsuits against these companies and make recommendations on their strengths and weaknesses.”
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Post time: May-07-2021