San Jose, Santa Clara County’s Cap fees for apps for grocery delivery

Santa Clara County and San Jose both have limits on how much grocery delivery apps can cost mom and pop restaurants struggling to survive the pandemic.

The district ordinance exceeds the fees at 15 percent of the cost of an order and applies as long as the ban on eating indoors at full capacity remains in effect. The San Jose fee limit expires in June. At that time, the city council may decide to extend it.

San Jose Mayor Sam Liccardo applauded his fellow councilors for unanimously supporting the fee limit.

“I am grateful that we were able to compromise with grocery shipping companies like DoorDash as they provide a lifeline for our local small businesses,” he said of the proposal he jointly sponsored with Lan Diep City Council.

At the county level, regulators Cindy Chavez and Joe Simitian unveiled the proposal, which will go into effect this weekend and will apply to all 15 unincorporated cities and areas in South Bay, with the exception of jurisdictions with more restrictive fee caps.

“I am pleased that we were able to change this in a week to meet the urgency of the situation,” said Simitian, who initially brought the referral to the December 8th meeting of the board of directors. “Many of these restaurants do not have the infrastructure to host their own takeout and delivery platforms. As a result, they are often forced to accept excessive fees and commissions, which can be as high as 30 percent or more.”

Covid-related downtime is already putting an extraordinary strain on small restaurants, especially now that they are for takeout only.

“Many of these companies rely on third parties like DoorDash, Uber Eats and Grubhub to meet their company’s delivery needs,” said Simitian. “While delivery providers offer an important service and are certainly within the scope of their fee rights for such services, the current pandemic unfortunately offers the possibility of price discounts. That is the problem we are dealing with. “

Click here to read the San Jose Policies and here to read the County’s Policies.

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