The commission cap on the Denver grocery delivery app is disappearing.
Councilor Kendra Black, who led efforts last fall to set a maximum of 15% on commissions billed to restaurants by apps for grocery delivery like DoorDash and Uber Eats, said the city will not exceed the cap extend June 14th when it expires.
Black said the commission cap was a response to struggles by local restaurants facing pandemic restrictions. She said she won’t push for it to be extended as restrictions on restaurants across the city were lifted since last week.
“Our Economic Development and Opportunities division is not inclined to endorse one industry over another, and there were a few cities and states across the country that had caps,” Black told BusinessDen. “(These cities are) all eliminate them. And I think the delivery industry has adapted, they got the message. “
Black said she would press to expand other elements of the measure passed last October. It also banned delivery apps from locking in restaurants without their permission and charging for phone calls that did not result in an order, and certain information should be included on receipts. Should a new measure be adopted, these elements will remain.
Black said ahead of the cap’s original passage that some restaurants were paying up to 35 percent for a meal ticket to the app companies. The measure originally lasted until February 9, but was extended to the next month in winter.
Denver wasn’t the only big city to legislate like this. San Francisco, Chicago and New York City were at the forefront.
The Chicago commission cap expired last month. New York’s was extended by 90 days after 100 percent capacity additions last summer, and San Francisco was able to hold its position for two months after the restaurants opened at full capacity.
“Restaurants are the heart of our communities and our culture,” said Black. “This has been a positive way of helping them during a stressful time.”
Black noted that DoorDash released a new “partnership plan” model last month, with three options for the commission paid by the restaurants.
Options vary from 15 percent for the simplest plan to 25 or 30 percent for the middle (“Plus”) and top (“Premier”) plans. The upper level plans provide access to “DashPass” customers. At the Premier level, a month without commission is offered if fewer than 20 offers are accepted through the app.
“Nationwide, third-party vendors have responded to caps like ours to create improved pricing structures that are acceptable to restaurant attorneys,” said Black.
DoorDash responded to Denver’s cap by charging customers a “Denver Fee” of $ 2 per order. However, a company spokeswoman said this week that the fee was recently suspended.
“In response to price controls in Denver, we introduced a small fee to ensure that we continue to provide merchants and customers with a high level of service while paying dashers significant revenue. We raised that fee earlier this month and look forward to continuing to work with policy makers to help restaurants recover. “