The D.C. Council unanimously passed emergency legislation Tuesday that aims to ensure that food delivery companies like DoorDash and UberEats don’t overcharge restaurants for basic services.
“What we heard from many small businesses and restaurants — without further protections, they would be forced to pay higher fees or see themselves reduced or removed from consumers just looking to buy a meal,” said Ward 6 Councilmember Charles Allen, who introduced the emergency legislation.
After the city’s 15% blunt cap on commission fees expired in March, food delivery companies started charging restaurants more money for enhanced services, including things like prioritization in search results for consumers. D.C. law still requires companies to provide basic delivery services to restaurants that only pay a 15% commission fee. But some restaurant owners said the low-cost basic plan effectively became a sham offering: They were losing customers because that plan meant being buried on the app and having fewer miles to deliver to. They found a sympathetic ear in Allen, who introduced an emergency bill in April to try to address these issues.
The bill stirred controversy in the council from its introduction, both because some food delivery companies opposed the measure and because the Restaurant Association of Metropolitan Washington (which represents hundreds of local restaurants) felt that the earlier version of the legislation didn’t go far enough in addressing membership’s concerns about delivery companies. That version of the bill was eventually tabled.
Allen’s amended bill, which passed Tuesday, aims to clarify what “basic services” are for food delivery apps, so that restaurants aren’t duped for agreeing to the lowest-cost plan. His bill, among other things, prevents companies from reducing the delivery area for a restaurant below four miles because the owner paid the lowest commission they could, which is 15%.
The bill also says a company cannot reduce the availability of delivery drivers to a restaurant based on the commissions paid — but at the same time, the bill does not preclude a company from prioritizing restaurants when owners pay more in commission. Because some restaurant owners said companies’ delivery plan options are too complicated, the bill also requires information regarding fees and services to be disclosed in “plain language.”
At the last minute to alleviate concerns from a fellow lawmaker, Allen struck language saying that a company cannot “reduce” the placement of a restaurant on its platform, like on an app’s page or in its search results, due to commissions paid. The new version says apps cannot exclude restaurants entirely based on commissions paid. Ward 5 Councilmember Zachary Parker expressed concerns over this change, saying “the reason for the emergency is being undermined.”
A RAMW spokesperson declined to comment on the latest version of the emergency legislation, though Allen’s office says the association supports the amended version.
DoorDash, meanwhile, opposed the amended bill. A spokesperson says the measure “would undermine the relationships platforms like DoorDash and our merchant partners agree upon, without any legitimate justification or examination of the potential unintended consequences.”
DoorDash offers restaurants several delivery plans to choose from, charging anywhere between 15% to 30%. “DoorDash helps local restaurants attract new customers and grow their businesses – regardless of which Partnership Plan the restaurant chooses,” the spokesperson tells DCist/WAMU via email.
A key lawmaker momentarily opposed the amended bill: At-Large Councilmember Kenyan McDuffie, who chairs the business committee. At the council’s morning breakfast, McDuffie said he opposed passing a bill on an emergency basis, preferring to pass a bill through the normal legislative process (emergency bills take immediate effect after mayoral review and don’t have to wait for approval from Congress, but they’re also temporary). He also said he would introduce his own permanent bill, addressing the concerns of not only restaurants but food delivery workers.
McDuffie’s bill would prevent companies from limiting a restaurant from the search results of a customer who’s within four miles of it, as well as prevent the company from reducing the availability of delivery drivers to a restaurant. He also would require restaurants that enter an agreement with the company to allow delivery workers to use the restroom facilities when performing services, which is a major issue for the workforce. The bill also mandates that a study be conducted on the working conditions of food delivery workers.
“I am concerned about this happening today and turning around and doing something comprehensive [later] and rolling back what we’re doing today. What kind of signals are we sending [if we do that]?” McDuffie said at the morning breakfast.
By Tuesday afternoon, during the legislative meeting, McDuffie changed his tune, saying he would support Allen’s amended bill. After a heated debate during the breakfast, Allen and McDuffie met privately in the council chambers. It would appear that lawmakers struck a deal. McDuffie voted yes to Allen’s amended bill after Allen introduced an oral amendment that struck language banning apps from reducing placement of restaurants on their platforms, and reduced the mandated delivery radius area for restaurants that pay a 15% fee from five miles to four.
McDuffie said at the legislative meeting that the oral amendment “lays a better foundation for us to move from passage of an emergency to a discussion that is more comprehensive about the restaurant industry.”
Amanda Michelle Gomez