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Thursday, July 9, 2020

Online Food Delivery Apps Cannot Charge More Than 10% Commission Fees to Restaurants in Poland

Home Delivery Food app: The food delivery apps like Grub hub, Uber Eats and DoorDash delivers foods to the customers.

The meeting held on Wednesday by Portland City Council decided that 3rd party food delivery apps like Grub hub and DoorDash cannot collect more than 10% commission fees from the restaurants during this pandemic situation.

Food Delivery Apps Cannot Charge More Than 10% Commission Fees to Restaurants in Poland
Food Delivery Apps Cannot Charge More Than 10% Commission Fees to Restaurants in Poland

Similar Ordinance already passed in the other cities like Seattle, Los Angeles and Philadelphia. Poland now added in this group. There are some cities which have decided the limits of 15%. In New Jersey, the service cap is 10% and this is applied to all restaurants in the state.

Before this Food Delivery company was charging as high as 30% commission fees.

The ordinance also state that food delivery apps like DoorDash, Uber Eats and other companies cannot decrease the payments of delivery workers in order to recover from the losses.

The city council also passed an amendment to incorporate 5% limitation when a customer orders a food through their apps and delivery service allows restaurant to deliver their own or pick up the items from the premises.

New amendment is valid till 90 days after Emergency order lifts in Poland. The date has not been decided to lift the order.

There is a penalty of $500 to the delivery apps if they violated the order. Everyday penalties will be accrue and for every restaurant overcharged. The restaurants have rights to sue the company who are involved if the refunds are rejected.

Commissioner Chloe Eudaly's office, Asian Pacific American Network of Oregon  and the Portland Independent Restaurant Alliance developed this order. That the ordinance was co sponsored by Mayor Ted Wheeler's office.

Decision of fee cap reduction would be a "lifeline" for small business owners across the city said by Jenny Lee, advocacy director with the Asian Pacific American Network of Oregon.

Due to coronavirus pandemic, communities like Chinese and Vietnamese living in the city are struggling to keep up their food costs, rent and wages of worker. Apart from these delivery app commission fees are also added. Most of the food business in Portland are owned by Black, Indigenous and other people of color around the city. And they are one who are directly impacted by the delivery apps commission fees. There will be a huge loss for this communities members if they are closed, Lee said.

The restaurants owner cannot bargain much on these platform because they serve meals to many Portlanders on a affordable rates. These small vendors businesses are already facing systemic inequity as they are most shut out of access of capital, white-dominant system of banking and government assistance programs.

Many restaurants in the city have opted out from delivery apps as it is now an expensive, due to commission fees. Due to pandemic, 

Katy Connors who is the member of Portland Independent Restaurant Allianc said that many restaurants in the city have opted out of working through delivery apps because they can’t afford the commission fees. Due this outbreak, the food delivery companies are thriving and the local restaurants sales are down. There is an increase of more than 100% in Uber Eats bookings in the second quarter compare to last year and also Uber announced buying of Postmates for $2.65 billion in stock on Monday said by Katy Connors, a member of the Portland Independent Restaurant Alliance.

We all now how much delivery services are essential during this time and we want our people to use it as per their convenient but not at the cost of sustainability of our business where every dollar counts. 

DoorDash, Grubhub and Uber Eats representatives have sent written statement to the city for opposing the amendments, saying higher fees may be passed to the customers. If delivery orders are less, it may result into loss of income for drivers and restaurants through the service. As per them some of them already started giving concessions for small businesses who are struggling. 

For example DoorDash said that they have temporarily reduced the commission fees collected from some businesses and not charging fees for pickup orders.

One of the worker from DoorDash, Rebecca Cordia said that the she is concerned about the new rule that it could lead to less wages for her and her colleagues. Herself and workers are making enough money through the food delivery apps and she plans to continue working as a driver. 

The fees which are charged by apps are directly get paid to delivery workers and we cannot afford to lose to income which are really essential. 

Eudaly said that even they are concerned about the drivers income and all the people who depends upon such gig economy to earn a livelihood. 

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