Portland City Council Approves Commission Caps on Third-Party Delivery Companies

It has been 2 weeks since the Portland City Council passed a City Wide Ordinance that limits commissions charged to restaurants by third party delivery services such as Doordash, Postmates, and Grubhub. The Emergency Order was passed unanimously and the 10% Commission Cap went into affect immediately. We are proud to have worked alongside Commissioner Eudaly’s Office and APANO to sponsor this bill. Many of you contributed to this community based campaign by signing on to our letter that advocated for the cap and filled out a survey that delivered crucial data that we presented to The Council. The video testimony that took place at the Council Meeting on July 8th is at the bottom of this post if you would like to watch.

This was a huge win for our local independent restaurant community, but unfortunately it has come to our attention that both Grubhub and Postmates are currently violating the Ordinance and not implementing the 10% Fee Cap. This is not only frustrating, it is appalling. This Emergency Order was voted into place by our City Leaders because our businesses are having an emergency… and emergency because of the lack of cash flow, an emergency of being unable and unwilling to open our dining spaces during this pandemic, an emergency because our landlords won’t cut us breaks.

These multi-billion dollar entities are disregarding our City laws and we are calling for a boycott. These are no longer partners, they are predators. We gave them an opportunity to work with us on reasonable terms, and they have proved they are not interested. We are currently working with the City Lawyers to develop a reporting and enforcement structure for these violations and will keep you updated. But in the meantime, this is what we know about what is currently happening:

Grubhub

Grubhub is apparently notorious for their hidden fees and shady behind the scenes workings. Right now, they are charging not only Delivery Commission, which they have at 10%, but they are also charging ‘Commissions’. This ‘Commissions’ line item in their payout is what they internally call ‘marketing commissions’ and they can vary depending on the contract. We have seen as high as 30%.

On top of both of these commission line items, they also have something called a ‘Targeted Promotion’ that they charge directly to the restaurant and it is unclear whether restaurants have the ability to opt in and out. This means that when a subscriber receives an email from Grubhub stating ‘$6 off of X restaurant this week’ or ‘No Delivery Fees for X Restaurants’… well, they push all of those would be charges directly on to the restaurant. Look at the photo below. For what would have been a $19.00 purchase, the restaurant received $6.60. This is almost 70% in commissions and fees and it is illegal.

We wrote the head of Public Affairs for Grubhub and she saw no issue in this practice and let us know there will not be any further change in commissions. We let her know that this was unacceptable and Commissioner Eudaly’s office has informed her of the violation and asked that Grubhub reimburse restaurants immediately. This situation is TBD, but while we wait it out stop using their tablet and delete the app of your phone #boycottgrubhub.

Postmates

Multiple cities passed commission caps during the COVID-19 crisis before Portland did, and every single time Postmates has delayed implementation due to a lack of ‘understanding’ the language of the bills that passed. They are currently charging restaurants the commission percentages that were set prior to the cap, which range from 20-30%. We contacted them and heard back the following:

‘We are working with the Portland municipality to understand the details of this new policy and the specifics of its implementation. Once we have clarity, we will be able to follow up and answer your questions. Please stay tuned for additional updates.’

This translates to —this is a strategy we have implemented in multiple cities because they know that with an Emergency Order, the regulation of such caps will be delayed and we don’t give a damn.

When we spoke to them on the phone this morning, we were told that once their lawyers review they will implement the 10% cap and reimburse restaurants. We are going to hold them to BOTH of those claims and we encourage all of you to reach out to your reps and get a statement, in writing, that you will be reimbursed during their lapse of implementation. Again, in the meantime, look for alternative delivery companies to partner with. Both Doordash and Caviar have implemented the 10% cap and did so within days of the Ordinance’s passage. If you need to set up an account with these companies, email Ryan their local Lead of Partnerships. CCC PDX is a locally based bike delivery company that we also support tremendously.

In conclusion

We know that this is exhausting and defeating. During this time when we should be focusing on the sustainability of our businesses, we are instead fighting for income that is being illegally taken away. The positive thing that has come out of all of this is the community based communication that has taken place about these fees and how we are going to fight them. We have power when we act together in the interest of our community.

Follow us on instagram for updates regarding this and other legislation that we will be working on in the coming weeks. Also! Katherine Chew Hamilton, Portland Monthly’s newest Food Editor, covered this story and posted an article today. Give it a read and follow her on Twitter for local food news.