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Bello, Barnhart call for permanent cap on food delivery fees

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Gino Fanelli/CITY
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Monroe County Executive Adam Bello.

County Executive Adam Bello is calling on the Monroe County Legislature to make permanent a cap on the fees that third-party delivery services can charge restaurants as the county’s COVID-19 state of emergency is set to end Sunday.

In December, Bello signed an executive order capping delivery fees for services like Grubhub, DoorDash, and Uber Eats, citing the large charges levied on restaurants who, at the time, had few other avenues to keep their business afloat. Bello capped the services’ delivery charges at 15% and their fees for orders made through the apps at 5%.

“It’s not uncommon for these services to charge restaurants as much as 30% of the purchase price on an order,” Bello said during a news conference at the Golden Fox Restaurant on Friday morning. “This common sense executive order worked, it saved countless restaurants thousands of dollars the six months it was in effect.”

Bello said the benefit to local restaurants has outweighed the potential profit garnered by the app companies. His executive order was similar to policies implemented in New York City, San Francisco, Seattle, and Portland, Oregon.

County Legislator Rachel Barnhart has been leading the charge to create a permanent fee cap on food delivery services, though the Legislature’s Republican majority tabled a measure she introduced in November that would have done just that. Bello then stepped in and issued his executive order.

Barnhart expects resistance in the legislature in getting the measure passed, but said the benefits over the past six months have been obvious, given restaurants were all but mandated to use the apps in order to survive.

“For customers to find them, they had to use these apps Grubhub and DoorDash, and in most cases, had to pay commission fees of 30%, sometimes more,” Barnhart said. “Think about that: every order, nearly a third off the top goes to a smartphone app.”

In late June, San Francisco became the first city in the country to place a permanent cap on delivery service fees, barring commissions above 15%. Other cities and regions are also pursuing similar policies, meaning Grubhub, Uber Eats, and DoorDash will likely have their business models pushed to the limits. For example, in June, New York City officials proposed a permanent 15% cap on the fees those services charge.

As reported by Eater, despite record-breaking revenues during the pandemic, the three main players in app-based delivery have struggled to turn a profit. Uber Eats, for example, lost $873 million in 2020, despite doubling their revenue compared to the previous year.

For local business owners, however, the cap has been a godsend. Corinna Kasandrinos, owner of the Golden Fox, said her business has saved about $8,000 since the executive order was put in place. Despite in-person diners returning — Grammy-nominated saxophonist Jimmie Highsmith Jr. sat at a table sipping a cup of coffee as Bello spoke — Kasandrinos said at least half of her business is still delivery and takeout.

“Keeping this cap permanent would greatly help us get back on our feet, function as we know it, and keep our community served the way they should be,” Kasandrinos said.

Gino Fanelli is a CITY staff writer. He can be reached at (585) 775-9692 or gino@rochester-citynews.com.