Mayor London Breed Announces Delivery Fee Cap to Support San Francisco Restaurants During COVID-19 Pandemic
Third-party delivery providers can charge restaurants no more than 15% commission for food delivery for the duration of the Local Emergency
San Francisco, CA — Mayor London N. Breed, Supervisor Ahsha Safaí, and Supervisor Aaron Peskin today announced a temporary limit on the commission that third-party food delivery companies can charge restaurants during the COVID-19 pandemic. The cap will be in effect through the remainder of the local emergency, or until businesses are permitted to reopen for dine-in service, whichever comes first. This fee cap is part of a broader effort to support small businesses in San Francisco during the COVID-19 pandemic.
Mayor Breed issued this order as part of a Supplement to the Local Emergency Declaration she made on February 25th. All Supplemental Declarations are available at https://sfmayor.org/mayoral-declarations-regarding-covid-19.
“Restaurants across San Francisco are struggling to stay open. In these tough financial circumstances, every dollar counts and can make the difference between a restaurant staying open, or shuttering. It can make the difference between staying afloat or needing to lay-off staff,” said Mayor Breed. “I want to thank Supervisor Safaí and Supervisor Peskin for working with me to support our local restaurants and help them get through this difficult time.”
“We’ve listened to our restaurants and the struggles they’re facing during this unprecedented time. The high commission fees being charged to our businesses remains unchanged and that cannot continue as every dollar can mean staying open or laying- off more staff,” said Supervisor Ahsha Safaí. “For San Francisco’s rich network of mom and pop restaurants to survive, it’s imperative that we move aggressively. I applaud Mayor Breed for working with us to take swift action.”
“These corporations have refused to adjust their fees and are profiting immensely off a public health crisis while restaurants and their employees are suffering,” said Supervisor Aaron Peskin. “They are trying to undercut responsible regulation in the midst of this emergency, while also denying worker demands for basic safety gear, hazard pay and adequate sick leave. I appreciate the Mayor acting quickly to provide immediate, temporary relief for San Francisco restaurants while we continue to work on more permanent relief.”
Under the City’s Stay Home Public Health Order, restaurants are not permitted to offer dine-in service. In order to stay open, restaurants are offering take-out and delivery, and many restaurants are relying on third-party delivery services to provide that delivery.
While some delivery services have waived fees on the customer-side, delivery services continue to charge restaurants a commission. These fees typically range from 10% to 30% and can represent a significant portion of a restaurant’s revenue, especially at a time when the vast majority of sales are for delivery. This commission fee can wipe out a restaurant’s entire margin.
Mayor Breed’s Order temporarily limits the fee that delivery companies can charge to 15%. This cap on delivery fees is intended to support small businesses during the COVID-19 pandemic, and will be in effect for the duration of the Local Emergency, or until restaurants are allowed to resume in-person dining. While delivery companies provide an important service and support local employment, establishing a cap on commission fees is necessary to help keep restaurants in business.
Restaurants are experiencing significant financial hardship during this time and are seeing a decline in business as a result of COVID-19 and the Stay Home Order. Of the approximately 4,000 restaurants in San Francisco, the Golden Gate Restaurant Association estimates 30% to 50% are still operating and offering food delivery. The California Employment Development Department and U.S. Department of Labor indicate that a large number of the statewide 2.3 million initial unemployment claims since March are service industry workers.
“During this time of crisis, every tool that relieves economic pressure on our San Francisco restaurant community matters,” said Joaquín Torres, Director of the Office of Economic and Workforce Development. “Mayor Breed’s and the City’s leadership provides relief for the restaurants that provide essential services to our communities, jobs for our workforce, and allows this vital part of our economy and culture to function for the ongoing benefit of our city.”
“We are very appreciative of the Mayor taking action to limit the amount delivery companies can charge restaurants to 15% for the duration of the emergency order,” said Laurie Thomas, Executive Director, Golden Gate Restaurant Association. “We have been advocating for this type of relief for the past month and we are appreciative of the progress. This move by the City will help ensure our restaurants who are staying open to deliver much needed food can continue to help keep staff on payroll in addition to giving them a better chance of keeping their doors open.”
This Supplemental Declaration is part of Mayor Breed’s ongoing efforts to support small businesses, including restaurants, during the COVID-19 pandemic. These initiatives to support small business include:
- $54 million in business taxes and licensing fees deferrals, impacting 11,000 payees;
- $10 million Workers and Families First Paid Sick Leave Program, proving up to 40 hours of paid sick leave per employee;
- $9 million Emergency Loan Fund providing up to $50,000 in zero interest loans for individual small businesses;
- $2 million Resiliency Grants providing up to $10,000 grants to over 200 small businesses;
- $2.5 million in support for working artists and arts and cultural organizations financially impacted by COVID-19;
- Supporting nonprofits funded by the City so workers don’t lose their incomes;
- Issuing a Moratorium on Commercial Evictions for small and medium sized businesses that can’t afford to pay rent;
- Advocating for additional resources for small business and workers through the federal CARE Act;
- Establishing City Philanthropic www.Give2SF.org Fund, where donations will support housing stabilization, food security, and financial security for workers and small businesses impacted by coronavirus;
- Launching a one stop City website for businesses and workers seeking resources, contacts, and updates during the COVID-19 emergency: www.oewd.org/covid19.