D.C.’s blunt 15% cap on fees that third-party delivery companies like DoorDash, Grubhub, and Uber Eats can charge restaurants per online order eased this month. Now, the city’s bars and restaurants are getting notices of increased commission fees, anywhere between 25% and 55%, if they want to keep their similar service. Food delivery companies are offering basic plans with a 15% commission fee, but restaurant owners see those barely as an option.

In May 2020, during the height of the pandemic, D.C. became one of several cities across the country to cap food delivery commission fees at 15%. The D.C. Council reasoned that restaurants were relying on delivery and takeout to stay afloat but had their online ordering profit eaten up by commissions. Delivery companies opposed the cap, arguing that it would result in higher fees for customers and decreased distance of deliveries. The Council did require companies to disclose fees to patrons in the legislation that ultimately passed and became law. Councilmembers continued to extend the cap throughout the pandemic, until recently.

Last December, the Council unanimously passed a bill that eased the blunt cap. Ward 6 Councilmember Charles Allen, one of the co-sponsors of the new law, the Fair Meals Delivery Act, explained in an email to DCist/WAMU that they sought to limit the delivery fees from companies to 15%, but allows them to charge restaurants a higher amount if they provide additional services.

But the 15% service option is loosely defined in D.C. law. A restaurant needs to be discoverable on the company’s platforms for deliveries. Companies also are required to notify all restaurants that have an existing agreement of the option within 30 days of the effective date of the law. The law kicked in on March 10.

Pie Shop owner Sandra Basanti received emails from DoorDash and Uber Eats on Thursday, notifying her that the companies will reinstate rates higher than 15% unless she downgrades to a basic plan. Changes are expected to occur on March 16.

“I’m so confused. It’s convoluted, not surprisingly,” said Basanti as she tried to make sense of the email and new plan options.

The email from DoorDash, which Basanti shared with DCist/WAMU, says the company will reinstate Pie Shop’s previous “Classic commission rate of 55%,” “pickup commission rate of 15%,” and “DashPass rate of 26%, where applicable”. DoorDash justified the changes by citing the new D.C. law.

In a screenshot that she shared with WAMU/DCist, DoorDash explains that the basic plan option with a 15% delivery commission rate effectively reaches fewer customers and has a smaller delivery area, although it’s unclear by how much as the provided information is vague. The other listed options take a 25% and 30% commission rate, but reach “high value customers” and accept 20 orders per month or pay zero commissions.

Basanti told DCist/WAMU that she never enrolled Pie Shop in a delivery plan where commission is 55%. She can’t afford that, so is reviewing DoorDash’s options.

Uber Eats, meanwhile, told Basanti that she’ll face 25% commission fees for services, which reflected her business’s pre-pandemic rates “soon.” The lowest cost plan of 15% limits the number of people who will see the restaurant on the app because customers could only see a business when they search for it by name, according to the email shared with DCist/WAMU.

“Every week, there’s something. We have to ‘pivot,'” Basanti told DCist/WAMU. “If we didn’t get the memo or we weren’t paying attention for one week, then it could result in us being slapped with fines or having to pay hefty commission charges or whatever it is.”

Restaurant owners tell DCist/WAMU that the price hikes sting as they are still recovering from the pandemic. They’re also reeling from other industry changes. For example, bar and restaurant owners also anticipate increased labor costs after D.C. voters passed Initiative 82 last November. That ballot measure gradually phases out tipped minimum wage, meaning tipped food service workers will gradually earn more until 2027, when they’ll start to earn the city’s full minimum wage, instead of relying on tips.

An Uber spokesperson tells DCist/WAMU that the company is giving D.C. restaurants until April 16th to prepare for the change or select another option.

“We recognize that the District’s restaurant industry is continuing to grapple with increasing costs, including new costs associated with Initiative 82. That is why we did not immediately revert merchants back to their pre-pandemic commissions once the law went into effect,” the spokesperson says via email. “We are fully transparent about our pricing, which is why all of our plans can be easily found on our website. It is not our business practice to charge merchants egregious fees, especially so soon after the change in the law. We want to do right by our restaurant partners and hope we can continue to work with them on how we can best meet their needs.”

The spokesperson also says that plans with fees higher than 15% account for the costs associated with additional marketing.

A DoorDash spokesperson says the company notified D.C. restaurants it partners with on March 2, explaining that the city’s commission cap would lift on March 16 and that they would be reverted to pre-pandemic rates unless restaurant owners selected a different plan. The spokesperson clarified that restaurants would not be charged commission rates that were higher than 30% for local delivery or 6% for pickup. There is an option for nationwide shipping, and those commission fees are greater because of higher shipping costs.

In April 2021, DoorDash introduced tiered plans around the country, but D.C. restaurants were exempted because of the city’s blunt 15% cap. Prior to the pandemic, delivery companies typically charged 30% commission fees for each patron’s order.

“We offer a range of partnership options for local restaurant partners to provide choice, flexibility, and transparency while empowering them to select a commission rate that works for them — including as low as 15% for delivery,” says the DoorDash spokesperson via email.

Basanti said she had no correspondence from DoorDash prior to March 16. Neither did restaurant owner Chris Svetlik, who said he only got an email from DoorDash on Thursday for Hill East Burger and not his other spot, Republic Cantina. The email says he’ll be charged a “Classic commission rate of 30%” and “DashPass rate of 30%, where applicable.”

“I knew it was coming,” Svetlik told DCist/WAMU. “This tiered model is where the delivery companies want to go, giving the perception of choice and giving a legally-mandated 15% for services tier that I anticipate will be extremely unattractive for a restaurant to sign up.”

Svetlik said he’ll crunch the numbers to determine what plan to get, but ultimately will have to make a judgment call. Svetlik and other local restaurant owners banded together to try and get the Council to make the 15% cap on delivery fees permanent, like New York City. They argued that small businesses are still struggling, with many of them owing back rent. They also faced historic costs for ingredients and dry goods. San Francisco, the first city to impose a blunt cap, reached a compromise with delivery companies and mirrors D.C.’s new law.

“It really felt like it was just us kind of screaming this into a void,” said Svetlik, adding that they struggled to get the local restaurant association to take up the issue. “So in the end it felt like we landed on a solution which was very favorable to the delivery apps.”

After learning about Pie Shop’s experience with DoorDash, which also circulated social media, Councilmember Charles Allen said in email to DCist/WAMU: “What’s happening is not meeting the spirit or intent of the law. It appears that big out-of-state tech corporations are using their leverage to coerce small, locally-owned restaurants into paying more without getting anything in return. It’s time to close this loophole and protect our neighborhood businesses.”

At Large Councilmember Kenyan McDuffie, another co-sponsor of the Fair Meals Delivery Act, says he’s aware of reports that DoorDash has implemented a new policy that appears to violate the spirit and intent of the law. “The 15% fee cap was intended to ensure that our local restaurant operators are not burdened by exorbitant fees, especially as they continue to recover from the pandemic,” he says in a statement. “I have reached out to DoorDash to express my deep concern about this new policy and demand that the company immediately clarify its food delivery policy for local restaurants to ensure its compliance with District law.”

Former Councilmember Mary Cheh of Ward 3, who tried to amend the new law, warned it would create a “race to the bottom” scenario, with 15% fee plans turning into a “sham offering.”

The city’s Office of the Attorney General, meanwhile, says as long as the fees are clearly disclosed to restaurants, they don’t have any authority under local consumer protection law to go after companies because those fees are high.

This post has been updated to include comment from At Large Councilmember Kenyan McDuffie and D.C.’s Office of the Attorney General.