By Bob Seidenberg
Evanston City Council members have removed limits on service fees that third-party delivery systems were charging on delivery or take-out orders from restaurants, maintaining the measure was never meant to be permanent.
Council members had in November 2020 passed a resolution that prohibited third-party delivery platforms from charging restaurants more than 15% in fees. Council members were acting at a time when many restaurants were reliant on delivery or takeout service because of the spread of COVID-19. The ceiling was intended to limit the fees some third-party platforms were including in their service agreements with restaurants.
With that action, the hope was “to ease the financial burden on local restaurants, while still allowing these third-party delivery platforms to recognize a significant profit,” staff noted in a memo. However, the resolution did not provide a termination date for the 15% cap on these third-party food-delivery service fees, officials noted.
“With the widespread availability of a COVID-19 vaccine, tracing, and treatment, COVID-19 cases have decreased in the city, and many restaurants in the city have resumed normal operations,” wrote Acting Deputy City Manager Dave Stoneback in a memo to the Council, recommending the change.
The memo said the cap was intended to help restaurants at that time but was never meant to be permanent, “and the need for limits on third-party delivery service fees is coming to an end.”
Addressing the Council’s Administration & Public Works Committee Feb. 28, Alexis Madden, a government-affairs representative for the restaurant-delivery service DoorDash, urged Council members to lift the restriction.
She said that early during the pandemic, the company took steps of its own to ease costs for customers.
“In spring of 2020, immediately after the shutdowns happened across the nation, DoorDash voluntarily cut commissions by 50%, and we’re proud to continue with our community efforts,” she said.
“While we completely understood and were compliant with the commission-cap here in Evanston over the last 18 months or so,” she said, “the time has come to lift the cap. As Evanston has just today lifted their mask and vaccination mandates, the town is slowly coming out of COVID restrictions. And we believe the cap should be included in those rollbacks to ensure the restaurants are continuously supported.”
Heading off a lawsuit?
In the Committee’s discussion of the issue, Council member Bobby Burns, 5th Ward, noted the cap was “put in at a time when it was very much so needed.”
At this point, he said, not only has the occupancy limit for restaurants been lifted, but also masks and proof of vaccine mandates, too.
“While I think there continues to be some concern from our restaurant operators about delivery costs,” he said, “I think that’s a different discussion at this point.”
Council member Jonathan Nieuwsma, 4th Ward, asked about the possibility of one of the delivery companies’ bringing a lawsuit against the city if the restriction was kept in place.
“Are we avoiding the threat of a potential lawsuit?” he asked staff.
Responding, Alexandra Ruggie, Assistant City Attorney, said it was her opinion that if the city left the cap in place, there was that possibility.
“But that would of course be up to the court system,” she said.
Council member Devon Reid, 8th Ward noted he previously opposed lifting the cap, and that the new wave of COVID cases followed.
“And so, I do think this [the cap] was appropriate.”
He said he and Burns had subsequently spoken or communicated through email with Madden and some local restaurant-owners about their concerns.
He joined other Council members –first at the committee level and then at Council – in voting to lift the 15% cap.
The change went into effect March 1.