City of Arcata passes ordinance limiting third party delivery charges

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ARCATA, Calif. (KIEM) — The Arcata City Council passed an urgency ordinance limiting the fees third party delivery services can charge during the Covid-19 pandemic.

Since the coronavirus pandemic began, local restaurants have had to adjust how they operate opting for takeout and delivery. Before the new ordinance, high fees charged by third party delivery services have been a burden on many businesses.

“It does feel like we all have to use it so the capping and not taking advantage of people is good,” according to Kristen Thompson, owner of Slice of Humboldt Pie.

The customer pays for their order through the app, then the delivery service pays the restaurant for the food. Restaurants were reporting being charged fees of about 30% of the menu item price, but now, the total fee allowed to be charged is only 15% of the menu price.

“The third party services would still be able to charge taxes or tips on top of this, but they’d have to turn over anything they get over 15% in term of their fees to the restaurants themselves,” according to Community Development Director David Loya.

Sushi Spot Arcata is one restaurant that has relied heavily on door dash, just one of the handful of third party delivery services available.

“It’s going to be really nice for him to be able to see more of a profit on his end instead of having to pay I believe 30% to DoorDash now the 15% will really help Bring in more revenue and offset the costs,” Jenny Valasquez, a floor manager at Sushi Spot Arcata, says.

While businesses are excited for the new limit on delivery charges, some still have concerns. Like how the change in fees will impact those that drive for the third party services.

“I just do also worry and want to make sure all the drivers are getting paid their fair share,” Thompson adds.

The City of Eureka has also approved a 15% cap on third party delivery fees as part of its bar, restaurants, and retail support program.