Technology

Chicago proposes 15% cap on third-party delivery fees

If approved, Chicago would become the latest major city to implement such a cap as delivery takes up a bigger part of restaurants' sales.
Chicago
Photograph: Shutterstock

Chicago Mayor Lori Lightfoot has proposed a 15% cap on the fees charged to restaurants by third-party delivery companies.

The move comes about two weeks after Chicago shut down indoor dining in the city, and is intended to help struggling restaurants that must now rely even more on delivery. Delivery companies like Grubhub and Uber Eats charge fees and commissions that can be as high as 30% or more. 

Under the measure, delivery fees could be no higher than 10%, and no combination of fees or commissions could be higher than 15%. That prevents delivery companies from continuing to charge normal rates for things like marketing, which can sometimes be as much as or more than delivery commissions.

If approved, Chicago would become the latest big city to add such a cap, joining New York, Los Angeles, Philadelphia and San Francisco. More than a dozen cities and counties have similar limits in place. 

In April, Chicago was considering a measure that would have capped fees at 5%, which would have been the most aggressive in the country. That didn’t get anywhere, but officials did approve a rule forcing delivery companies to disclose all fees and commissions.

Violators under this new proposal would be charged between $1,000 and $3,000 per day. The ordinance would last until 90 days after COVID-19 restrictions are lifted.

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