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Cleveland ordinance signed capping commission fees on food delivery services

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Posted at 2:37 PM, Dec 16, 2020
and last updated 2020-12-16 14:37:58-05

CLEVELAND — Cleveland Mayor Frank Jackson signed an ordinance that will cap the commission fee that third parties can charge on delivery or pickup orders in the city.

Under the ordinance, which Jackson signed on Tuesday, delivery or pick-up orders placed using third-party services such as Uber Eats or Doordash will have commission fees capped to a maximum of 15% of the purchase price.

The goal is to ease the financial burden on struggling restaurants while they are unable to provide unrestricted dine-in service while still promoting the availability of prepared food using delivery services.

Some of the third-party food delivery services were able to charge commission fees of 30% or more of the purchase price prior to the ordinance being signed.

Under the ordinance, if a third-party service charges an establishment a commission that exceeds 15% of the purchase price of an online order, the restaurant will be able to provide written notice to the service requesting a refund of the excess charged within seven days. If a refund is not given within seven days of the notice, the service will be found in violation of the ordinance.

The ordinance also states that no third-party food delivery service will be permitted to reduce the compensation rates paid to any driver or garnish gratuities paid to any driver as a result of the capped commission fees.

Under the ordinance, third-party food delivery services in violation can be found guilty of a first-degree misdemeanor.

The ordinance will be in effect until 90 after food and drink establishments are able to operate at 100% capacity with no restrictions.